[House Report 116-150]
[From the U.S. Government Publishing Office]


116th Congress   }                                     {        Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                     {       116-150

======================================================================



 
                           RAISE THE WAGE ACT

                                _______
                                

 July 11, 2019.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Scott of Virginia, from the Committee on Education and Labor, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 582]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Education and Labor, to whom was referred 
the bill (H.R. 582) to provide for increases in the Federal 
minimum wage, and for other purposes, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     4
Committee Action.................................................     6
Committee Views..................................................    14
Section-by-Section Analysis......................................    45
Explanation of Amendments........................................    47
Application of Law to the Legislative Branch.....................    47
Unfunded Mandate Statement.......................................    47
Earmark Statement................................................    47
Roll Call Votes..................................................    47
Statement of Performance Goals and Objectives....................    56
Duplication of Federal Programs..................................    56
Hearings.........................................................    56
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    56
New Budget Authority and CBO Cost Estimate.......................    56
Committee Cost Estimate..........................................    60
Changes in Existing Law Made by the Bill, as Reported............    60
Minority Views...................................................    78

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Raise the Wage Act''.

SEC. 2. MINIMUM WAGE INCREASES.

  (a) In General.--Section 6(a)(1) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 206(a)(1)) is amended to read as follows:
          ``(1) except as otherwise provided in this section, not less 
        than--
                  ``(A) $8.55 an hour, beginning on the effective date 
                under section 7 of the Raise the Wage Act;
                  ``(B) $9.85 an hour, beginning 1 year after such 
                effective date;
                  ``(C) $11.15 an hour, beginning 2 years after such 
                effective date;
                  ``(D) $12.45 an hour, beginning 3 years after such 
                effective date;
                  ``(E) $13.75 an hour, beginning 4 years after such 
                effective date;
                  ``(F) $15.00 an hour, beginning 5 years after such 
                effective date; and
                  ``(G) beginning on the date that is 6 years after 
                such effective date, and annually thereafter, the 
                amount determined by the Secretary under subsection 
                (h);''.
  (b) Determination Based on Increase in the Median Hourly Wage of All 
Employees.--Section 6 of the Fair Labor Standards Act of 1938 (29 
U.S.C. 206) is amended by adding at the end the following:
  ``(h)(1) Not later than each date that is 90 days before a new 
minimum wage determined under subsection (a)(1)(G) is to take effect, 
the Secretary shall determine the minimum wage to be in effect under 
this subsection for each period described in subsection (a)(1)(G). The 
wage determined under this subsection for a year shall be--
          ``(A) not less than the amount in effect under subsection 
        (a)(1) on the date of such determination;
          ``(B) increased from such amount by the annual percentage 
        increase, if any, in the median hourly wage of all employees as 
        determined by the Bureau of Labor Statistics; and
          ``(C) rounded up to the nearest multiple of $0.05.
  ``(2) In calculating the annual percentage increase in the median 
hourly wage of all employees for purposes of paragraph (1)(B), the 
Secretary, through the Bureau of Labor Statistics, shall compile data 
on the hourly wages of all employees to determine such a median hourly 
wage and compare such median hourly wage for the most recent year for 
which data are available with the median hourly wage determined for the 
preceding year.''.

SEC. 3. TIPPED EMPLOYEES.

  (a) Base Minimum Wage for Tipped Employees and Tips Retained by 
Employees.--Section 3(m)(2)(A)(i) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 203(m)(2)(A)(i)) is amended to read as follows:
          ``(i) the cash wage paid such employee, which for purposes of 
        such determination shall be not less than--
                  ``(I) for the 1-year period beginning on the 
                effective date under section 7 of the Raise the Wage 
                Act, $3.60 an hour;
                  ``(II) for each succeeding 1-year period until the 
                hourly wage under this clause equals the wage in effect 
                under section 6(a)(1) for such period, an hourly wage 
                equal to the amount determined under this clause for 
                the preceding year, increased by the lesser of--
                          ``(aa) $1.50; or
                          ``(bb) the amount necessary for the wage in 
                        effect under this clause to equal the wage in 
                        effect under section 6(a)(1) for such period, 
                        rounded up to the nearest multiple of $0.05; 
                        and
                  ``(III) for each succeeding 1-year period after the 
                increase made pursuant to subclause (II), the minimum 
                wage in effect under section 6(a)(1); and''.
  (b) Tips Retained by Employees.--Section 3(m)(2)(A) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)) is amended--
          (1) in the second sentence of the matter following clause 
        (ii), by striking ``of this subsection, and all tips received 
        by such employee have been retained by the employee'' and 
        inserting ``of this subsection. Any employee shall have the 
        right to retain any tips received by such employee''; and
          (2) by adding at the end the following: ``An employer shall 
        inform each employee of the right and exception provided under 
        the preceding sentence.''.
  (c) Scheduled Repeal of Separate Minimum Wage for Tipped Employees.--
          (1) Tipped employees.--Section 3(m)(2)(A) of the Fair Labor 
        Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)), as amended by 
        subsections (a) and (b), is further amended by striking the 
        sentence beginning with ``In determining the wage an employer 
        is required to pay a tipped employee,'' and all that follows 
        through ``of this subsection.'' and inserting ``The wage 
        required to be paid to a tipped employee shall be the wage set 
        forth in section 6(a)(1).''.
          (2) Publication of notice.--Subsection (i) of section 6 of 
        the Fair Labor Standards Act of 1938 (29 U.S.C. 206), as 
        amended by section 5, is further amended by striking ``or in 
        accordance with subclause (II) or (III) of section 
        3(m)(2)(A)(i)''.
          (3) Effective date.--The amendments made by paragraphs (1) 
        and (2) shall take effect on the date that is one day after the 
        date on which the hourly wage under subclause (III) of section 
        3(m)(2)(A)(i) of the Fair Labor Standards Act of 1938 (29 
        U.S.C. 203(m)(2)(A)(i)), as amended by subsection (a), takes 
        effect.

SEC. 4. NEWLY HIRED EMPLOYEES WHO ARE LESS THAN 20 YEARS OLD.

  (a) Base Minimum Wage for Newly Hired Employees Who Are Less Than 20 
Years Old.--Section 6(g)(1) of the Fair Labor Standards Act of 1938 (29 
U.S.C. 206(g)(1)) is amended by striking ``a wage which is not less 
than $4.25 an hour.'' and inserting the following: ``a wage at a rate 
that is not less than--
          ``(A) for the 1-year period beginning on the effective date 
        under section 7 of the Raise the Wage Act, $5.50 an hour;
          ``(B) for each succeeding 1-year period until the hourly wage 
        under this paragraph equals the wage in effect under section 
        6(a)(1) for such period, an hourly wage equal to the amount 
        determined under this paragraph for the preceding year, 
        increased by the lesser of--
                  ``(i) $1.25; or
                  ``(ii) the amount necessary for the wage in effect 
                under this paragraph to equal the wage in effect under 
                section 6(a)(1) for such period, rounded up to the 
                nearest multiple of $0.05; and
          ``(C) for each succeeding 1-year period after the increase 
        made pursuant to subparagraph (B)(ii), the minimum wage in 
        effect under section 6(a)(1).''.
  (b) Scheduled Repeal of Separate Minimum Wage for Newly Hired 
Employees Who Are Less Than 20 Years Old.--
          (1) In general.--Section 6(g) of the Fair Labor Standards Act 
        of 1938 (29 U.S.C. 206(g)), as amended by subsection (a), shall 
        be repealed.
          (2) Publication of notice.--Subsection (i) of section 6 of 
        the Fair Labor Standards Act of 1938 (29 U.S.C. 206), as 
        amended by section 3(c)(2), is further amended by striking ``or 
        subparagraph (B) or (C) of subsection (g)(1),''.
          (3) Effective date.--The repeal and amendment made by 
        paragraphs (1) and (2), respectively, shall take effect on the 
        date that is one day after the date on which the hourly wage 
        under subparagraph (C) of section 6(g)(1) of the Fair Labor 
        Standards Act of 1938 (29 U.S.C. 206(g)(1)), as amended by 
        subsection (a), takes effect.

SEC. 5. PUBLICATION OF NOTICE.

  Section 6 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206), as 
amended by the preceding sections, is further amended by adding at the 
end the following:
  ``(i) Not later than 60 days prior to the effective date of any 
increase in the required wage determined under subsection (a)(1) or 
subparagraph (B) or (C) of subsection (g)(1), or in accordance with 
subclause (II) or (III) of section 3(m)(2)(A)(i) or section 
14(c)(1)(A), the Secretary shall publish in the Federal Register and on 
the website of the Department of Labor a notice announcing each 
increase in such required wage.''.

SEC. 6. PROMOTING ECONOMIC SELF-SUFFICIENCY FOR INDIVIDUALS WITH 
                    DISABILITIES.

  (a) Wages.--
          (1) Transition to fair wages for individuals with 
        disabilities.--Subparagraph (A) of section 14(c)(1) of the Fair 
        Labor Standards Act of 1938 (29 U.S.C. 214(c)(1)) is amended to 
        read as follows:
          ``(A) at a rate that equals, or exceeds, for each year, the 
        greater of--
                  ``(i)(I) $4.25 an hour, beginning 1 year after the 
                date the wage rate specified in section 6(a)(1)(A) 
                takes effect;
                  ``(II) $6.40 an hour, beginning 2 years after such 
                date;
                  ``(III) $8.55 an hour, beginning 3 years after such 
                date;
                  ``(IV) $10.70 an hour, beginning 4 years after such 
                date;
                  ``(V) $12.85 an hour, beginning 5 years after such 
                date; and
                  ``(VI) the wage rate in effect under section 6(a)(1), 
                on the date that is 6 years after the date the wage 
                specified in section 6(a)(1)(A) takes effect; or
                  ``(ii) if applicable, the wage rate in effect on the 
                day before the date of enactment of the Raise the Wage 
                Act for the employment, under a special certificate 
                issued under this paragraph, of the individual for whom 
                the wage rate is being determined under this 
                subparagraph,''.
          (2) Prohibition on new special certificates; sunset.--Section 
        14(c) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
        214(c)) (as amended by paragraph (1)) is further amended by 
        adding at the end the following:
          ``(6) Prohibition on new special certificates.--
        Notwithstanding paragraph (1), the Secretary shall not issue a 
        special certificate under this subsection to an employer that 
        was not issued a special certificate under this subsection 
        before the date of enactment of the Raise the Wage Act.
          ``(7) Sunset.--Beginning on the day after the date on which 
        the wage rate described in paragraph (1)(A)(i)(VI) takes 
        effect, the authority to issue special certificates under 
        paragraph (1) shall expire, and no special certificates issued 
        under paragraph (1) shall have any legal effect.
          ``(8) Transition assistance.--Upon request, the Secretary 
        shall provide--
                  ``(A) technical assistance and information to 
                employers issued a special certificate under this 
                subsection for the purposes of--
                          ``(i) transitioning the practices of such 
                        employers to comply with this subsection, as 
                        amended by the Raise the Wage Act; and
                          ``(ii) ensuring continuing employment 
                        opportunities for individuals with disabilities 
                        receiving a special minimum wage rate under 
                        this subsection; and
                  ``(B) information to individuals employed at a 
                special minimum wage rate under this subsection, which 
                may include referrals to Federal or State entities with 
                expertise in competitive integrated employment.''.
          (3) Effective date.--The amendments made by this subsection 
        shall take effect on the date of enactment of this Act.
  (b) Publication of Notice.--
          (1) Amendment.--Subsection (i) of section 6 of the Fair Labor 
        Standards Act of 1938 (29 U.S.C. 206), as amended by section 
        4(b)(2), is further amended by striking ``or section 
        14(c)(1)(A),''.
          (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the day after the date on which the wage 
        rate described in paragraph (1)(A)(i)(VI) of section 14(c) of 
        the Fair Labor Standards Act of 1938 (29 U.S.C. 214(c)), as 
        amended by subsection (a)(1), takes effect.

SEC. 7. GENERAL EFFECTIVE DATE.

  Except as otherwise provided in this Act or the amendments made by 
this Act, this Act and the amendments made by this Act shall take 
effect--
          (1) subject to paragraph (2), on the first day of the third 
        month that begins after the date of enactment of this Act; and
          (2) with respect to the Commonwealth of the Northern Mariana 
        Islands, on the date that is 18 months after the effective date 
        described in paragraph (1).

SEC. 8. GAO REPORT.

  Not later than 1 year after the date of enactment of this Act, the 
Comptroller General shall submit to the Education and Labor Committee 
of the House of Representatives and the Committee on Health, Education, 
Labor, and Pensions of the Senate a report that, with respect to the 
Commonwealth of the Northern Mariana Islands--
          (1) assesses the status and structure of the economy 
        (including employment, earnings and wages, and key industries); 
        and
          (2) for each year in which a wage increase will take effect 
        under subsection (a)(1) or (g)(1) of section 6, section 
        3(m)(2)(A)(i), or section 14(c)(1)(A) of the Fair Labor 
        Standards Act of 1938 (29 U.S.C. 201 et seq.), as amended by 
        this Act, estimates the proportion of employees who will be 
        directly affected by each such wage increase taking effect for 
        such year, disaggregated by industry and occupation.

                          Purpose and Summary

    In 1938, President Franklin D. Roosevelt signed into law 
the Fair Labor Standards Act of 1938 (FLSA), landmark 
legislation that established a minimum hourly wage, set maximum 
hours standards, and banned oppressive child labor.\1\ The 
minimum wage was established as a living wage--an essential 
protection for workers in the wake of the Great Depression when 
employers were slashing wages and increasing hours. Congress 
intended to prevent employers from competing on the backs of 
workers by lowering wage costs, based on the understanding that 
the uneven bargaining power between workers and employers could 
lead workers to accept wages too low to maintain a decent 
standard of living.\2\
---------------------------------------------------------------------------
    \1\Jonathan Grossman, U.S. Dep't of Labor, Fair Labor Standards Act 
of 1938: Maximum Struggle for a Minimum Wage, U.S. Dep't of Labor, 
https://www.dol.gov/general/aboutdol/ history/flsa1938.
    \2\Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706-07 (1945) (``The 
legislative history of the Fair Labor Standards Act shows an intent on 
the part of Congress to protect certain groups of the population from 
substandard wages and excessive hours which endangered the national 
health and well-being and the free flow of goods in interstate 
commerce. The statute was a recognition of the fact that due to the 
unequal bargaining power as between employer and employee, certain 
segments of the population required federal compulsory legislation to 
prevent private contracts on their part which endangered national 
health and efficiency and as a result the free movement of goods in 
interstate commerce.'').
---------------------------------------------------------------------------
    Congress has legislated increases nine times during the 80 
years since the FLSA's inception, effectuating 22 increases in 
the federal minimum wage. However, over the last 40 years 
Congress has failed to sufficiently raise the federal minimum 
wage enough to maintain a standard of living. This, combined 
with a 10 year lapse in the last increase in the federal 
minimum wage, has severely eroded the value of the minimum 
wage. Today's minimum wage workers earn almost $3 per hour 
less, adjusted for inflation, than their counterparts over 50 
years ago, despite being significantly more productive.\3\ An 
individual earning the current federal minimum wage of $7.25 an 
hour and working full time earns only $15,080 annually.\4\ This 
income level puts a family of two below the federal poverty 
level and a family of three or four well below the federal 
poverty level ($16,910 a year for a two-person family in 2018; 
$21,330 a year for a three-person family; $25,750 for a four-
person family ).\5\ H.R. 582, the Raise the Wage Act (the Act), 
would restore the value of the federal minimum wage and ensure 
that minimum wage workers no longer earn poverty level wages.
---------------------------------------------------------------------------
    \3\David Cooper, Raising the Minimum Wage to $15 by 2024 Would Lift 
Pay for Nearly 40 Million American Workers 2 (2019), https://
www.epi.org/files/pdf/160909.pdf.
    \4\Calculation estimated based on working 40 hours a week and 52 
weeks a year.
    \5\ U.S. Dep't of Health and Human Servs., 2019 Poverty Guidelines, 
https://aspe.hhs.gov/2019-poverty-guidelines.
---------------------------------------------------------------------------
    H.R. 582 increases the federal minimum wage to $15 by 2024 
in six steps. After reaching $15 an hour, the legislation 
indexes future increases in the federal minimum wage to median 
wage growth to ensure the value of the minimum wage does not 
once again erode over time.\6\ The Act guarantees tipped 
workers and teenaged workers are paid at least the full federal 
minimum wage by gradually repealing the subminimum wage for 
tipped workers and the rarely used subminimum wage for teenage 
workers. The Act also ends rarely used subminimum wage 
certificates for individuals with disabilities.
---------------------------------------------------------------------------
    \6\David Cooper, Raising the Minimum Wage to $15 by 2024 Would Lift 
Pay for Nearly 40 Million American Workers 14 (2019), https://
www.epi.org/files/pdf/160909.pdf (indexing the minimum wage to median 
wages would ensure that low-wage workers share in broad improvements in 
U.S. living standards and would help prevent future growth in 
inequality between low- and middle-wage workers).
---------------------------------------------------------------------------
    Gradually raising the federal minimum wage from $7.25 to 
$15 by 2024 over six steps will raise wages for nearly 40 
million workers. In this way, this legislation will lift 
millions of workers out of poverty, stimulate local economies, 
and benefit businesses.

                            Committee Action


                             110TH CONGRESS

    On January 4, 2007, Senator Harry Reid (D-NV) introduced S. 
2, the Fair Minimum Wage Act of 2007, which would have raised 
the federal minimum wage from $5.15 to $5.85 60 days after 
enactment, to $6.55 one year after the effective date, and to 
$7.25 two years after the effective date. It had 41 Democratic 
cosponsors, one Independent cosponsor, and one Independent 
Democrat cosponsor.
    On January 5, 2007, Congressman George Miller (D-CA-7) 
introduced the House companion bill, H.R. 2, the Fair Minimum 
Wage Act of 2007. It had 214 Democratic cosponsors and 8 
Republican cosponsors. It was referred to the House Committee 
on Education and Labor. The House passed H.R. 2 by a vote of 
315-116 on January 10, 2007.
    On January 16, 2007, the Senate Committee on Health 
Education Labor and Pensions (Senate HELP Committee) held a 
hearing on raising the minimum wage titled, ``Economic 
Opportunity and Security for Working Families.'' The Senate 
HELP Committee heard testimony from Dr. Eileen Applebaum, 
Professor and Director, Center for Women and Work at Rutgers 
University; Reverend Dr. James Alexander Forbes Jr., Senior 
Minister, The Riverside Church; Dr. Jacob Hacker, Associate 
Professor, Yale University; and Mrs. Anna Cablik, President, 
ANATEK, Inc.
    On January 22, 2007, H.R. 2 was brought before the Senate 
by unanimous consent. On February 1, 2007 the Senate passed 
H.R. 2, as amended, by a vote of 94-3.
    On March 27, 2007, Senator Edward M. Kennedy (D-MA) offered 
an amendment to H.R. 1591, the U.S. Troop Readiness, Veterans' 
Care, Katrina Recovery, and Iraq Accountability Appropriations 
Act, 2007, to include the text of the Fair Minimum Wage Act and 
separate tax provisions. The amendment passed and H.R. 1591 was 
passed by the Senate on March 29, 2007, by a vote of 51-47. On 
April 24, 2007, House and Senate conferees agreed to a 
conference report, H. Report 110-17, which included the text of 
the Kennedy Amendment. The House agreed to the conference 
report on April 25, 2007 by a vote of 218-208, and the Senate 
agreed to the report the next day by a vote of 51-46. On May 1, 
2007, President Bush vetoed H.R. 1591. On May 2, 2007, the 
House failed to override the President's veto by a vote of 222-
203.
    On May 8, 2007, Congressman David R. Obey (D-WI-7) 
introduced H.R. 2206, the U.S. Troop Readiness, Veterans' Care, 
Katrina Recovery, and Iraq Accountability Appropriations Act, 
2007. The bill was passed by the House on May 10, 2007 by a 
vote of 221-205. The bill was then passed by the Senate on a 
voice vote on May 17, 2007. The President signed H.R. 2206 on 
May 25, 2007. It became Pub. L. No. 110-28.
    On December 13, 2007, Congressman Al Green (D-TX-9) 
introduced H.R. 4637, the Living American Wage (LAW) Act of 
2007. The bill would have required the federal minimum wage to 
be adjusted every four years to a level equal to five percent 
above the wage level necessary for a full-time worker to earn 
above the poverty threshold for a family of three. The bill had 
no cosponsors and was referred to the House Committee on 
Education and Labor. No further action was taken on this bill.

                             111TH CONGRESS

    On May 21, 2009, Congresswoman Donna Edwards (D-MD-4) 
introduced H.R. 2570, the Working for Adequate Gains for 
Employment in Services (WAGES) Act. The bill would have raised 
the federal tipped minimum wage to 70 percent of the full 
federal minimum wage. It had 38 Democratic cosponsors and was 
referred to the House Committee on Education and Labor. No 
further action was taken on this bill.
    On June 25, 2009, Congressman Green (TX-9) introduced H.R. 
3041, the Living American Wage (LAW) Act of 2009. The bill 
would have required the federal minimum wage to be adjusted 
every four years to a level equal to 15 percent above the wage 
level required for a full-time worker to earn above the poverty 
threshold for a family of two. It had four Democratic 
cosponsors and was referred to the House Committee on Education 
and Labor. No further action was taken on this bill.

                             112TH CONGRESS

    On February 25, 2011, Congressman Green (TX-9) introduced 
H.R. 283, the Living American Wage (LAW) Act of 2011. It had 12 
Democratic cosponsors. It was referred to the House Committee 
on Education and the Workforce, where it was referred to the 
Subcommittee on Workforce Protections. On June 29, 2012 
Congressman Green (TX-9) introduced a new version of the bill 
as H.R. 6076, the Original Living American Wage (LAW) Act. Both 
bills would have required the federal minimum wage to be 
adjusted every four years to a level equal to 15 percent above 
the wage level required for a full-time worker to earn above 
the poverty threshold for a family of two. It had no cosponsors 
and was referred to the House Committee on Education and the 
Workforce, where it was referred to the Subcommittee on 
Workforce Protections. No further action was taken on either 
bill.
    On March 4, 2011, Congresswoman Edwards (MD-4) introduced 
H.R. 631, the Working for Adequate Gains for Employment in 
Services (WAGES) Act. It would have raised the federal tipped 
minimum wage to 70 percent of the full federal minimum wage. It 
had 34 Democratic cosponsors. It was referred to the House 
Committee on Education and the Workforce, where it was referred 
to the Subcommittee on Workforce Protections. No further action 
was taken on this bill.
    On July 26, 2012, Senator Tom Harkin (D-IA) and Congressman 
Miller (CA-7) introduced S. 3453 and H.R. 6211, the Fair 
Minimum Wage Act of 2012, respectively. The bills would have 
raised the federal minimum wage to $8.10 three months after 
enactment, $8.95 one year after the effective date, and $9.80 
two years after the effective date. The bills would also have 
indexed future increases in the minimum wage to the Consumer 
Price Index for all Urban Wage Earners and Clerical Workers 
(CPI-W) and raised the tipped minimum wage to 70 percent of the 
full minimum wage. S. 3453 had 15 Democratic cosponsors and one 
Independent cosponsor and was referred to the Senate HELP 
Committee. H.R. 6211 had 117 Democratic cosponsors and was 
referred to the House Committee on Education and the Workforce, 
where it was referred to the Subcommittee on Workforce 
Protections. No further action was taken on either bill.

                             113TH CONGRESS

    On March 5, 2013, Senator Harkin introduced S. 460, the 
Fair Minimum Wage Act of 2013. It would have raised the federal 
minimum wage to $8.20 three months after enactment, $9.15 one 
year after the effective date, and $10.10 two years after the 
effective date. The bill would also have indexed future 
increases in the minimum wage to the CPI-W and raised the 
tipped minimum wage to 70 percent of the full minimum wage. It 
had 32 Democratic cosponsors and one Independent cosponsor. It 
was referred to the Senate HELP Committee.
    The Senate HELP Committee held a hearing on the Fair 
Minimum Wage Act on March 14, 2013. The hearing was titled 
``Keeping up with a Changing Economy: Indexing the Minimum 
Wage.'' The Senate HELP Committee heard testimony from Mr. Brad 
Avakian, Commissioner with the Oregon Bureau of Labor and 
Industries; Dr. Arindrajit Dube, Professor of Economics at 
University of Massachusetts Amherst; Mr. Lew Price, Managing 
Partner of Vintage Vinyl; Ms. Carolle Fleurio, a restaurant 
worker; Mr. Melvin Sickler, Auntie Anne's Pretzels and Cinnabon 
Franchisee; and Mr. David Rutigigliano, owner of Southport 
Brewing Company.
    On November 19, 2013, Senator Harkin introduced S. 1737, 
the Minimum Wage Fairness Act. The bill had 38 Democratic 
cosponsors and one Independent cosponsor. It would have raised 
the federal minimum wage to $8.20 one year after passage, $9.15 
one year after the effective date, and $10.10 two years after 
the effective date. The bill would also have indexed future 
increases in the minimum wage to the CPI-W and raised the 
tipped minimum wage to 70 percent of the full minimum wage. The 
bill was reintroduced by Senator Harkin on April 8, 2014, as S. 
2223. On April 30, 2014, Senator Reid's cloture motion to 
proceed on the bill failed by a vote of 54-42. Senator Reid 
moved to reconsider the bill but later withdrew the motion. No 
further action was taken on the bill.
    On January 14, 2013, Congressman Green (TX-9) introduced 
H.R. 229, the Original Living American Wage (LAW) Act. The bill 
would have required the federal minimum wage to be adjusted 
every four years to a level equal to 15 percent above the wage 
level required for a full-time worker to earn above the poverty 
threshold for a family of two. The bill had eight Democratic 
cosponsors. It was referred to the House Committee on Education 
and the Workforce, where it was referred to the Subcommittee on 
Workforce Protections. Congressman Green (TX-9) reintroduced 
the bill on June 11, 2014, as H.R. 4839. It had 35 Democratic 
cosponsors. No further action was taken on either bill.
    On March 6, 2013, Congressman Miller (CA-7) introduced H.R. 
1010, the Fair Minimum Wage Act of 2013. It would have raised 
the federal minimum wage to $8.20 one year after passage, $9.15 
one year after the effective date, and $10.10 two years after 
the effective date. The bill would also have indexed future 
increases in the minimum wage to the CPI-W and raised the 
tipped minimum wage to 70 percent of the full minimum wage. The 
bill had 197 Democratic cosponsors. The bill was referred to 
the House Committee on Education and the Workforce, where it 
was referred to Subcommittee on Workforce Protections.
    On March 26, 2013, Congressman Gregg Harper (R-MS-3) 
introduced H.R. 831, the Fair Wages for Workers with 
Disabilities Act of 2013. The bill would have repealed Section 
14(c) of the FLSA and phased out the subminimum wage for 
workers with disabilities over three years. The bill had 73 
Democratic and 24 Republican cosponsors. The bill was referred 
to the House Committee on Education and the Workforce, where it 
was referred to the Subcommittee on Workforce Protections. No 
further action was taken on this bill.
    On April 13, 2013, Congresswoman Edwards (MD-4) introduced 
H.R. 650, the Working for Adequate Gains for Employment in 
Services (WAGES) Act. It would have raised the federal tipped 
minimum wage to 70 percent of the full federal minimum wage. 
The bill had 29 Democratic cosponsors. The bill was referred to 
the House Committee on Education and the Workforce, where it 
was referred to the Subcommittee on Workforce Protections. No 
further action was taken on this bill.
    On April 23, 2013, Congressman Alan Grayson (D-FL-9) 
introduced H.R. 1346, the Catching Up To 1968 Act. It would 
have immediately raised the federal minimum wage to $10.50, 
indexed future increases in the minimum wage to the Consumer 
Price Index for All Urban Consumers (CPI-U), raised the tipped 
minimum wage to 70 percent of the full minimum wage, and 
eliminated exemptions for some agricultural and domestic 
workers. The bill had 19 Democratic cosponsors and was referred 
to the House Committee on Education and the Workforce, where it 
was referred to the Subcommittee on Workforce Protections. No 
further action was taken on this bill.
    On December 12, 2013, Congressman John Larson (D-CT-1) 
reintroduced the Fair Minimum Wage Act of 2013 as H.R. 3746. It 
would have raised the federal minimum wage to $8.50 three 
months after enactment, $10.00 a year after the effective date, 
and $11.00 two years after the effective date. The bill would 
also have indexed future increases in the minimum wage to the 
CPI-W and raised the tipped minimum wage to 70 percent of the 
full minimum wage. The bill had no cosponsors and was referred 
to the House Committee on Education and the Workforce. No 
further action was taken on the bill.
    On January 28, 2014, Congressman Richard Neal (D-MA-1) 
introduced H.R. 3939, the Invest in United States Act of 2014. 
It had one Democratic cosponsor and was referred to the House 
Committees on Ways and Means, Transportation and 
Infrastructure, and Education and the Workforce. It would have 
raised the federal minimum wage to $8.20 one year after 
passage, $9.15 one year after the effective date, and $10.10 
two years after the effective date. The bill would also have 
indexed future increases in the minimum wage to the CPI-W and 
raised the tipped minimum wage to 50 percent of the full 
minimum wage. In the House Committee on Education and the 
Workforce, it was referred to the Subcommittee on Workforce 
Protections. No further action was taken on this bill.
    On February 26, 2014, Congressman Timothy Bishop (D-NY-1) 
filed a motion to discharge H.R. 1010 from the House Committee 
on Education and the Workforce. The discharge petition gained 
196 signatures, short of the 218 signatures needed for further 
action.

                             114TH CONGRESS

    On January 6, 2015, Congressman Green (TX-9) introduced 
H.R. 122, the Original Living Wage Act of 2015. The bill would 
have required the federal minimum wage to be adjusted every 
four years to a level equal to 15 percent above the wage level 
required for a full-time worker to earn above the poverty 
threshold for a family of two. It had 18 Democratic cosponsors 
and was referred to the House Committee on Education and the 
Workforce, where it was referred to the Subcommittee on 
Workforce Protections. The bill was later incorporated into 
H.R. 2721, the Pathways Out of Poverty Act of 2015, introduced 
by Congresswoman Barbara Lee (D-CA-13) on June 10, 2015. H.R. 
2721 was referred to the House Committee on Education and the 
Workforce, where it was referred to the Subcommittee on Higher 
Education and Workforce Training. No further action was taken 
on either bill.
    On January 7, 2015, Congressman Harper (MS-3) introduced 
H.R. 188, the Transitioning to Integrated and Meaningful 
Employment (TIME) Act. The bill would have repealed Section 
14(c) of the FLSA and phased out the subminimum wage for 
workers with disabilities over three years. The bill had 59 
Democratic and 24 Republican cosponsors and was referred to the 
House Committee on Education and the Workforce, where it was 
referred to the Subcommittee on Workforce Protections. On 
August 5, 2015, Senator Kelly Ayotte (R-NH) introduced the 
Senate companion, S. 2001, the Transitioning to Integrated and 
Meaningful Employment (TIME) Act. The bill was referred to the 
Senate HELP Committee. No further action was taken on either 
bill.
    On April 30, 2015, Senator Patty Murray (D-WA) introduced 
S. 1150, the Raise the Wage Act. S. 1150 had 33 Democratic 
cosponsors and was referred to the Senate HELP Committee. On 
the same day Congressman Robert C. ``Bobby'' Scott (D-VA-3) 
introduced the House companion bill, H.R. 2150. H.R. 2150 had 
175 Democratic cosponsors and was referred to the House 
Committee on Education and the Workforce, where it was referred 
to the Subcommittee on Workforce Protections. The bills would 
have raised the federal minimum wage to $8.00 30 days after 
enactment, $9.00 one year later, $10.00 two years later, $11.00 
three years later, and $12.00 four years later. The bill would 
also have indexed future increases in the minimum wage to 
changes in median wages and eliminated the tipped minimum wage. 
No further action was taken on either bill.
    On July 22, 2015, Senator Bernard Sanders (I-VT) introduced 
S. 1832, the Pay Workers a Living Wage Act. S. 1832 had five 
Democratic cosponsors and was referred to the Senate HELP 
Committee. On the same day Congressman Keith Ellison (D-MN-5) 
introduced the House companion bill, H.R. 3164. H.R. 3164 had 
56 Democratic cosponsors and was referred to the House 
Committee on Education and the Workforce, where it was referred 
to the Subcommittee on Workforce Protections. The bills would 
have raised the federal minimum wage to $9.00 in the first year 
after passage, $10.50 a year after the effective date, $12.00 
two years after the effective date, $13.50 three years after 
the effective date, and $15.00 four years after the effective 
date. The bill would also have indexed future increases in the 
minimum wage to changes in median wages, eliminated the tipped 
minimum wage, and increased the youth subminimum wage rate. No 
further action was taken on either bill.
    On February 9, 2016, Congressman Donald Norcross (D-NJ-1) 
introduced H.R. 4508, the Fair Wage Act. The bill would have 
raised the federal minimum wage to $8.00 30 days after 
enactment, $9.00 one year later, $10.00 two years later, $11.00 
three years later, $12.00 four years later, $13.00 five years 
later, $14.00 six years later, and $15.00 seven years later, 
and would index future increases in the minimum wage to 
increases in the CPI-W. It had three Democratic cosponsors. It 
was referred to the House Committees on Education and the 
Workforce and Ways and Means. In the House Committee on 
Education and the Workforce, it was referred to the 
Subcommittee on Workforce Protections. No further action was 
taken on this bill.

                             115TH CONGRESS

    On January 3, 2017, Congressman Green (TX-9) introduced 
H.R. 122, the Original Living Wage Act of 2017. The bill would 
have required the federal minimum wage to be adjusted every 
four years to a level equal to 15 percent above the wage level 
required for a full-time worker to earn above the poverty 
threshold for a family of four. It had 10 Democratic cosponsors 
and was referred to the House Committee on Education and the 
Workforce. No further action was taken on this bill.
    On March 7, 2017, Congressman Harper (MS-3) introduced 
H.R.1377, the Transitioning to Integrated and Meaningful 
Employment Act of 2017. The bill would have repealed Section 
14(c) of the FLSA and phased out the subminimum wage for 
workers with disabilities over six years. The bill had 37 
Democratic and 15 Republican cosponsors. It was referred to the 
House Committee on Education and the Workforce. No further 
action was taken on this bill.
    On May 11, 2018, Congressman Cedric Richmond (D-LA-2) 
introduced H.R. 5785, the Jobs with Justice Act of 2018. The 
bill would have raised federal minimum wage to $9.25 on the 
effective date, $10.10 beginning one year later, $11.00 two 
years later, $12.00 three years later, $13.00 four years later, 
$13.50 five years later, $14.25 six years later, and $15.00 
seven years later. The bill also would have indexed future 
increases in the minimum wage to increases in median wages and 
eliminated subminimum wages for young workers, workers 
receiving tips, and workers with disabilities. The bill had 44 
Democratic cosponsors. The bill was referred to the House 
Committees on Judiciary; Oversight and Government Reform; 
Financial Services; Transportation and Infrastructure; Ways and 
Means; Energy and Commerce; Budget; Education and the 
Workforce; Science, Space, and Technology; Veterans' Affairs; 
Homeland Security; Armed Services; Small Business; House 
Administration; and Agriculture. No further action was taken on 
this bill.
    On May 25, 2017, Senator Sanders (I-VT) introduced S. 1242, 
the Raise the Wage Act. S. 1242 had 31 Democratic cosponsors 
and was referred to the Senate HELP Committee. On the same day 
Congressman Scott (VA-3) introduced the House companion bill, 
H.R. 15. H.R. 15 had 171 Democratic cosponsors and was referred 
to the House Committee on Education and the Workforce. The 
bills would have raised federal minimum wage to $9.25 on the 
effective date, $10.10 beginning one year later, $11.00 two 
years later, $12.00 three years later, $13.00 four years later, 
$13.50 five years later, $14.25 six years later, and $15.00 
seven years later. The bills would also have indexed future 
increases in the minimum wage to increases median wages and 
eliminated the subminimum wages for young workers, tipped 
workers, and workers with disabilities. No further action was 
taken on either bill.

                             116TH CONGRESS

    On January 3, 2019, Congressman Green (TX-9) introduced 
H.R. 122, the Original Living Wage Act with no cosponsors. The 
bill would have required the federal minimum wage to be 
adjusted every four years to a level equal to 25.5 percent 
above the wage level required for a full-time worker to earn 
above the poverty threshold for a family of four. It was 
referred to the House Committee on Education and Labor. No 
further action has been taken on this bill.
    On January 16, 2019, Senator Sanders (I-VT) introduced 
S.150, the Raise the Wage Act. S. 150 was introduced with 30 
cosponsors and was referred to the Senate HELP Committee. No 
further action has been taken on this bill. On the same day 
Congressman Scott (VA-3) introduced the House companion bill, 
H.R. 582.
    H.R. 582 has 205 cosponsors, including 188 original 
cosponsors. The bill was referred to the House Committee on 
Education and Labor (hereinafter, the Committee). On February 
7, 2019, the Committee held a legislative hearing entitled, 
``Gradually Raising the Minimum Wage to $15: Good for Workers, 
Good for Businesses, and Good for the Economy'' (hereinafter, 
the February 7th hearing). Witnesses included Dr. William 
Spriggs, Professor at Howard University and Chief Economist for 
the AFL-CIO; Mr. Terrence Wise, a shift manager at McDonald's; 
Dr. Douglas Holtz-Eakin, President of the American Action 
Forum; Dr. Ben Zipperer, Economist at the Economic Policy 
Institute; Ms. Vanita Gupta, President and CEO of the 
Leadership Conference on Civil and Human Rights; Ms. Simone 
Barron, restaurant worker at a full service restaurant; Ms. 
Kathy Eckhouse, owner of La Quercia; Dr. Michael Strain, 
Resident Scholar and Director of Economic Policy Studies at the 
American Enterprise Institute; Dr. Michael Reich, Professor of 
Economics at University of California Berkeley; and Mr. Paul 
Brodeur, Massachusetts State Representative.
    On Wednesday, March 6, 2019, the Committee met for a full 
committee markup of H.R. 582, the Raise the Wage Act. The 
Committee adopted an amendment in the nature of a substitute 
(ANS) offered by Congressman Scott (VA-3), Chairman of the 
Committee, and reported the bill favorably to the House of 
Representatives by a vote of 28-20.
    The ANS incorporates the provisions of H.R. 582 with the 
following modifications:
           It amends Section 4 to clarify H.R. 582's 
        language to fully repeal Section 6(g) of the FLSA by 
        striking FLSA subsections 6(g)(2)-(5). These provisions 
        were added to the FLSA by Pub. L. No. 114-187, the 
        Puerto Rico Oversight, Management, and Economic 
        Stability Act (PROMESA). PROMESA increased the age 
        under which a worker in Puerto Rico may be paid the 
        youth minimum wage from 20 to the age of 25. The law 
        also allowed the Governor of Puerto Rico to increase 
        the allowable length of time that an employer can pay 
        the youth subminimum wage for up to five years. The ANS 
        removes these provisions from the underlying statute.
           It amends Section 7 to set the effective 
        date in the Commonwealth of the Northern Mariana 
        Islands (CNMI) as 18 months after the bill's general 
        effective date.
           It adds Section 8, requiring the Comptroller 
        General (Government Accountability Office or GAO) to 
        review the economic conditions in the CNMI, estimate 
        the proportion of employees directly affected by such 
        wage increase (disaggregated by industry and 
        occupation), and submit a report to Congress within one 
        year after enactment.
    The following amendments to the ANS were offered, but not 
adopted:
           Congressman Ben Cline (R-VA-6) offered an 
        amendment to prohibit minimum wage increases under the 
        Act from taking effect if, during the year prior to the 
        effective date: (1) monthly employment growth is 
        negative for 3 consecutive months; (2) total non-farm 
        unemployment increases by more than 0.25 percent in a 
        month; or (3) the national unemployment rate is above 6 
        percent in a month. The amendment failed by a vote of 
        19-28.
           Congressman Dan Meuser (R-PA-9) offered an 
        amendment to exclude enterprises with fewer than ten 
        employees or less than $1 million in annual gross 
        volume of sales from minimum wage increases under the 
        Act. The amendment failed by a vote of 21-24.
           Congressman Rick Allen (R-GA-12) offered an 
        amendment to prohibit minimum wage increases under the 
        Act unless the unemployment rate for individuals aged 
        16 to 24 is below 8 percent for each of the 12 months 
        prior to the effective dates for such increases. The 
        amendment failed by a vote of 20-28.
           Congressman Lloyd Smucker (R-PA-11) offered 
        an amendment to prohibit state and local governments 
        from adopting a minimum wage requirement if an employer 
        is exempt from such a requirement for employees covered 
        by a bona fide collective bargaining agreement. The 
        amendment failed by a vote of 20-28.
           Congresswoman Virginia Foxx (R-NC-5), 
        Ranking Member of the Committee, offered an amendment 
        to strike provisions setting the effective date in the 
        CNMI. The amendment failed by a vote of 20-28.
           Congressman Ron Wright (R-TX-6) offered an 
        amendment to prohibit the Act from taking effect unless 
        (1) the Comptroller General (Government Accountability 
        Office or GAO) submits a report to Congress, no later 
        than 1 year after the date of enactment, on the Act's 
        impact on employment and automation, and (2) such 
        report finds that the Act will not result in the loss 
        of more than 500,000 jobs due to automation. The 
        amendment failed by a vote of 21-27.
           Congressman Phil Roe (R-TN-1) offered an 
        amendment to prohibit the Act from taking effect unless 
        (1) the Comptroller General (Government Accountability 
        Office or GAO) submits a report to Congress, no later 
        than 1 year after the date of enactment, on the Act's 
        impact on areas with a median hourly wage less than 
        $18, and (2) such report finds that the Act will not 
        result in the loss of more than 200,000 jobs in such 
        areas. The amendment failed by a vote of 20-27.

                            Committee Views

    The Committee is committed to restoring the value of the 
federal minimum wage and ensuring that all workers, regardless 
of where they work, are able to earn a fair day's pay for a 
fair day's work. Gradually raising the minimum wage is good for 
workers, who experience a better standard of living; good for 
businesses, which benefit from an expanded customer base and 
less worker turnover; and good for the economy, which is 
strongest when policy reduces poverty and promotes a thriving 
middle class.

   THE HISTORY OF THE MINIMUM WAGE UNDER THE FAIR LABOR STANDARDS ACT

The Federal minimum wage was established as a living wage with workers 
        of color excluded

    On June 25, 1938, President Roosevelt signed the FLSA, 
landmark legislation that established a minimum hourly wage, 
set maximum hours standards, and banned oppressive child 
labor.\7\ Passed as part of the New Deal, this legislation was 
enacted to ensure that all workers had a minimum living 
standard. In 1937, President Roosevelt declared that ``[a] 
self-supporting and self-respecting democracy can plead no 
justification for the existence of child labor, no economic 
reason for chiseling workers' wages or stretching workers' 
hours.''\8\
---------------------------------------------------------------------------
    \7\Jonathan Grossman, Fair Labor Standards Act of 1938: Maximum 
Struggle for a Minimum Wage, 101 Monthly Labor Review 22-30 (1978), 
available at https://www.jstor.org/stable/41840777.
    \8\Id.
---------------------------------------------------------------------------
    The minimum wage was established as a living wage as an 
essential protection for workers in the wake of the Great 
Depression when employers were slashing wages and increasing 
hours. Recognizing rampant abuses of workers, President 
Roosevelt quipped in 1933, ``[n]o business which depends for 
existence on paying less than living wages to its workers has 
any right to continue in this country.''\9\ He went on to 
clarify, ``by `business' I mean the whole of commerce as well 
as the whole of industry; by workers I mean all workers, the 
white-collar class as well as the men in overalls; and by 
living wages, I mean more than a bare subsistence level--I mean 
the wages of decent living.''\10\ Five years before he signed 
the FLSA into law, President Roosevelt made it apparent that 
the minimum wage was never intended to be merely an entry-level 
wage, but rather a floor at which Americans could be paid and 
still live comfortably.
---------------------------------------------------------------------------
    \9\ President Franklin D. Roosevelt, Statement the National 
Industrial Recovery Act (June 16, 1933), Franklin D. Roosevelt 
Presidential Library, http://docs.fdrlibrary.marist.edu/odnirast.html.
    \10\Id.
---------------------------------------------------------------------------
    The 1938 House Committee on Labor further elucidated this 
need for the minimum wage to be a living wage:

          Unless the wages paid by private employers are 
        sufficient to maintain the bare cost of living, [sic] 
        demands [on the state and federal government for work 
        and work relief] will necessarily continue. The payment 
        of oppressive wages is not only detrimental to 
        interstate commerce and to the health and well-being of 
        employees of employers engaged in interstate commerce, 
        but also casts a direct burden for the support of such 
        employees upon Government. Government cannot 
        indefinitely provide what is in effect a subsidy for 
        such employers--a subsidy made necessary by the 
        inability of the great majority of such employers to 
        maintain fair labor standards in the face of wage cuts 
        by chiseling competitors.\11\
---------------------------------------------------------------------------
    \11\H. Rept. No. 75-2182, at 6 (1938).

    Although the federal minimum wage was established to ensure 
workers had livable wages, unfortunately, as first passed, the 
FLSA contained broad exclusions aimed at depriving workers of 
color of minimum wage protections. During debate on the FLSA, 
some Southern Members of Congress expressed their opposition to 
a federal minimum wage on the ground that it threatened to 
equalize wages between African American and White laborers.\12\ 
For example, Congressman Mark Wilcox (D-FL-4) stated during 
floor debate:
---------------------------------------------------------------------------
    \12\Sean Farhang & Ira Katznelson, The Southern Imposition: 
Congress and Labor in the New Deal and Fair Deal 14 (2005), https://
gspp.berkeley.edu/assets/uploads/research/pdf/article_4.pdf.

          We may rest assured, therefore, that when we turn 
        over to a federal bureau or board the power to fix 
        wages, it will prescribe the same wage for the Negro 
        that it prescribes for the [W]hite man. Now, such a 
        plan might work in some sections of the United States 
        but those of us who know the true situation know that 
        it just will not work in the South.\13\
---------------------------------------------------------------------------
    \13\ Id.

    As a compromise to secure votes from Southern lawmakers, 
the FLSA, as passed in 1938, excluded industries in which 
people of color were the majority of the workforce, including 
agriculture and domestic work. In 1930, approximately 58 
percent of Black workers in the South were agricultural or 
domestic workers.\14\ Southern lawmakers understood that, by 
carving out agricultural and domestic workers from the FLSA, 
they undermined the leveling effects of a federal minimum and 
could thereby ``maintain the relation of inequality between the 
races in massive sectors of southern labor markets in which 
blacks were densely concentrated.''\15\ While many of the FLSA 
exclusions for domestic and agriculture workers have since been 
removed, the effects of these exclusions remain.
---------------------------------------------------------------------------
    \14\Sean Farhang & Ira Katznelson, The Southern Imposition: 
Congress and Labor in the New Deal and Fair Deal 15 (2005), https://
gspp.berkeley.edu/assets/uploads/research/pdf/article__4.pdf.
    \15\ Id.
---------------------------------------------------------------------------

Past increases to the minimum wage were more frequent

    Since 1938, Congress has passed legislation that increases 
the federal minimum wage nine times--four of those in the last 
40 years.\16\ Congressional action has effectuated a federal 
minimum wage increase 22 times. Up until 2009, the most recent 
year the minimum wage increased, an average of three years 
passed between minimum wage adjustments. As shown in Table 1, 
for only seven of the 22 increases in the last 80 years has 
more than five years passed between minimum wage increases. 
Because Congress has not raised the federal minimum wage, on 
June 16, 2019, the nation entered the longest period of time 
that the federal minimum wage has gone unchanged in the law's 
80-year history.
---------------------------------------------------------------------------
    \16\David Cooper, Raising the Minimum Wage to $15 by 2024 Would 
Lift Pay for Nearly 40 Million American Workers 2 (2019), https://
www.epi.org/files/pdf/160909.pdf.
---------------------------------------------------------------------------
    Congress last legislated an increase in the federal minimum 
wage in 2007 during the George W. Bush Administration with 
Democratic control of the House and Senate. H.R. 2, The Fair 
Minimum Wage Act of 2007, was introduced by then-Chairman of 
the House Education and Labor Committee, Congressman George 
Miller (D-CA-11), with 214 original cosponsors.\17\ H.R. 2 
passed the House as a stand-alone bill on January 10, 2007 by a 
vote of 315-116. Notably, 82 Republicans voted in favor of the 
bill.\18\ Ultimately, the provisions in the bill were included 
in Pub. L. No. 110-28, the U.S. Troop Readiness, Veterans' 
Care, Katrina Recovery, and Iraq Accountability Appropriations 
Act, 2007, enacted May 25, 2007. Pursuant to the legislation, 
the federal minimum wage increased over three years from $5.15 
to $5.85 in 2007, to $6.55 in 2008, and to $7.25 in 2009 (an 
increase of $0.70 per hour each year). The minimum wage has 
remained at $7.25 per hour since July 24, 2009.\19\
---------------------------------------------------------------------------
    \17\Fair Minimum Wage Act of 2007, H.R. 2, 110th Cong. (2007).
    \18\153 Cong. Rec. H260 (2007) (daily ed. Jan. 10, 2007) (Roll Call 
18).
    \19\29 U.S.C. Sec. 206(a)(1)(C).

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Despite congressional inaction, 29 states and the District 
of Columbia have minimum wages higher than the federal minimum 
wage (as of April 2019). Additionally, 41 localities have 
minimum wages higher than their state's minimum wage. Since 
2014, 25 states and the District of Columbia have changed their 
minimum wage laws. Seven of these states--California, 
Connecticut, Illinois, Massachusetts, New Jersey, New York, and 
Maryland--have enacted laws phasing in a $15 per hour minimum 
wage. On January 1, 2019, nineteen states raised their minimum 
wages through previously approved legislation, newly approved 
ballot initiatives, or automatic inflationary adjustments. 
These increases will provide an estimated 5.2 million workers 
with an additional $5.3 billion in wages over the course of 
2019.\21\
---------------------------------------------------------------------------
    \21\David Cooper, Over 5 Million Workers Will have Higher Pay on 
January 1 Thanks to State Minimum Wage Increases, Working Econs. Blog 
(Dec. 26, 2018, 5:00 AM), https://www.epi.org/blog/over-5-million-
workers-will-have-higher-pay-on-january-1-thanks-to-state-minimum-wage-
increases/.
---------------------------------------------------------------------------

THE DECLINING VALUE OF THE FEDERAL MINIMUM WAGE HAS CONTRIBUTED TO WAGE 
                               STAGNATION

    Low-wage workers comprise a significant portion of the U.S. 
workforce; this group of workers includes those who earn the 
minimum wage or less, as well as those who earn poverty-level 
and near-poverty-level wages. According to the BLS, 1.8 million 
workers, or 2.3 percent of all workers, earn wages at or below 
the federal minimum wage (some earn less than the minimum due 
to FLSA coverage exemptions).\22\ The majority (51 percent) of 
these workers are over the age of 25, overwhelmingly women (60 
percent), and disproportionately workers of color (nearly 40 
percent).\23\ Beyond those earning the federal minimum wage are 
the one in nine U.S. workers who are paid wages that leave them 
in poverty, even when working full time and year-round.\24\ 
There is no precise definition of a low wage worker, but as Dr. 
Zipperer testified at the February 7th hearing, ``[m]ore 
broadly low-wage workers today constitute a large portion of 
the workforce. About [sic] 25 percent of all workers earned $13 
or less per hour in 2018 and the vast majority of them would 
benefit from a minimum wage increase to $15 by 2024.''\25\
---------------------------------------------------------------------------
    \22\Bureau of Labor Statistics Rep. No. 1072, Characteristics of 
Minimum Wage Workers 2017 1 (2018), https://www.bls.gov/opub/reports/
minimum-wage/2017/pdf/home.pdf.
    \23\Id.
    \24\David Cooper, One in nine U.S. workers are paid wages that can 
leave them in poverty, even when working full time, Econ. Snapshot 
(June 15, 2018), https://www. epi. org/publication/one-in-nine-u-s-
workers-are-paid-wages-that-can-leave-them-in-poverty-even-when-
working-
full-time/.
    \25\Gradually Raising the Minimum Wage to $15: Good for Workers, 
Good for Businesses, and Good for the Economy Before H. Comm. on Educ. 
and Labor, 116th Cong. (2019) (written testimony of Ben Zipperer, 
Economist at the Econ. Policy Inst., at 3) [Hereinafter ``Zipperer 
Testimony''].
---------------------------------------------------------------------------
    The federal minimum wage impacts low-wage workers by 
setting a wage floor. For low-wage workers, the institution of 
a federal minimum wage may be one of the few mechanisms 
providing upward pressure on their wages. This is especially 
true where a decline of union membership has meant a smaller 
percentage of the U.S. workforce has its wages set through 
collective bargaining. Union density has decreased from 33.2 
percent in 1956 to 10.7 percent of the workforce in 2017,\26\ 
limiting workers' bargaining power.
---------------------------------------------------------------------------
    \26\Josh Bivens et al., How Today's Unions Help Working People, 
Econ. Policy Inst. 9 (2017), https://www.epi.org/publication/how-
todays-unions-help-working-people-giving-workers-the-power-to-improve-
their-jobs-and-unrig-the-economy/; Bureau of Labor Statistics, Union 
Membership (Annual) News Release, Econ. News Release (Jan. 18, 2019, 
10:00 AM), https://www.bls.gov/news.release/union2.htm.
---------------------------------------------------------------------------
    In the 1980s, the real value of the minimum wage dropped as 
federal increases failed to keep up with inflation. Federal 
increases in the 1990s also failed to compensate for this 
erosion. Even the three consecutive $0.70 per hour increases 
implemented in 2007, 2008, and 2009 failed to restore the 
inflation-adjusted value of the minimum wage to its pre-1980 
levels. Since the last minimum wage increase to $7.25 an hour 
in 2009, the value of the minimum wage has fallen by 17 
percent.\27\ This means that ``[i]n 2018, a worker earning 
$7.25 per hour needs an extra 41 working days more than eight 
weeks--just to take home the same pay as she did in a single 
year when the federal minimum wage was last increased.''\28\
---------------------------------------------------------------------------
    \27\David Cooper, Congress has never let the federal minimum wage 
erode for this long, Econ. Snapshot (Jun. 17, 2019), https://
www.epi.org/publication/congress-has-never-let-the-federal-minimum-
wage-erode-for-this-long/.
    \28\Rachel West, March 1 is Minimum Wage Workers' Equal Pay Day, 
Ctr. for Am. Progress (Mar. 1, 2018, 10:00 AM), https://
www.americanprogress.org/issues/poverty/news/2018/03/01/447359/march-1-
minimum-wage-workers-equal-pay-day/.
---------------------------------------------------------------------------
    The minimum wage has also failed to keep up with increases 
in worker productivity. Between 1973 and 2017, workers' 
productivity grew by 77 percent, while the typical worker's 
hourly wages grew by just 12 percent in real terms.\29\ The 
widening gap between how much workers produce and how much they 
are paid is one major factor contributing to the historic 
levels of income inequality. Had the minimum wage kept pace 
with worker productivity, as it once did, it would be more than 
$20 per hour today.\30\ Had the value of the federal minimum 
wage in 1968, its historical high point, simply grown at the 
rate of average wages, it would be approximately $12 per hour 
today.\31\
---------------------------------------------------------------------------
    \29\Econ. Policy Inst., The Productivity-Pay Gap, https://
www.epi.org/productivity-pay-gap/.
    \30\Zipperer Testimony at 2 (See 45:15).
    \31\Economic Policy Institute's analysis of the Fair Labor 
Standards Act and amendments. Based on the average hourly wages of 
production nonsupervisory workers from the Bureau of Labor statistics 
Current Employment Statistics.
---------------------------------------------------------------------------
    As a direct result of the decline in the value of the 
minimum wage, hourly pay for workers earning the federal 
minimum wage has declined in real terms since 1979. Today's 
minimum wage workers earn nearly $3 an hour less, adjusted for 
inflation, than their counterparts over 50 years ago earned, 
despite being significantly more productive.\32\ This means 
workers are making 29 percent less in real terms than what 
their counterparts made nearly 50 years ago.\33\
---------------------------------------------------------------------------
    \32\Cooper, supra note 3, at 2.
    \33\Zipperer Testimony at 2.
---------------------------------------------------------------------------
    The widening gap between the value of the minimum wage and 
the median wage is another indicator of growing income 
inequality. At its peak in inflation-adjusted terms, the 1968 
minimum wage ($1.60 per hour) was about half of the typical 
hourly worker's wages at that time (the median hourly wage in 
1968 was about $20 in 2018 dollars and the minimum wage was 
about $10). Today, at $7.25 an hour, the minimum wage is only 
about one-third of the median hourly wage.\34\ This widening 
gap shows the extent to which low-wage workers are losing 
ground in today's economy. As Dr. Spriggs testified at the 
February 7th hearing, citing a David Autor and Alan Manning 
report, a significant portion of wage inequality that developed 
during the 1980s between workers at the bottom ten percent of 
the wage distribution and median wage earners was because the 
federal minimum wage was unchanged between 1981 and 1990.\35\
---------------------------------------------------------------------------
    \34\Cooper, supra note 3, at 6 (For full-time, full-year workers).
    \35\Gradually Raising the Minimum Wage to $15: Good for Workers, 
Good for Businesses, and Good for the Economy Before H. Comm. on Educ. 
and Labor, 116th Cong. (2019) (written testimony of William E. Spriggs, 
Professor of Economics at Howard University and Chief Economist to the 
AFL-CIO, at 6) [Hereinafter ``Spriggs Testimony'']; See also David H. 
Autor et al., The Contribution of the Minimum Wage to US Wage 
Inequality over Three Decades: A Reassessment, 8 Am. Econ. Journal: 
Applied Econs. 58 (2016).
---------------------------------------------------------------------------
    The declining value of the minimum wage and slow wage 
growth for low-wage workers have left millions of workers 
economically insecure, undermining the minimum wage's original 
purpose as a living wage. As Dr. Spriggs testified at the 
February 7th hearing:

          Since 1980, the once strong relationship between an 
        expanding economy, falling unemployment and lower 
        poverty levels became weak. Improvements in the living 
        standards of lower income working families no longer 
        comes from work, but from transfers, primarily through 
        Medicaid and Medicare. The expansion of the 1980s made 
        little progress on lowering poverty, as did the 
        expansion from 2001 to 2008.\36\
---------------------------------------------------------------------------
    \36\Spriggs Testimony at 6.

    An individual earning the federal minimum wage of $7.25 an 
hour and working full time earns only $15,080 pre-tax 
annually.\37\ This income level would put a family of two below 
the federal poverty level ($16,910 for a two-person family in 
2018).\38\
---------------------------------------------------------------------------
    \37\Based on working 40 hours a week and 52 weeks a year.
    \38\U.S. Dep't of Health and Human Servs., 2019 Poverty Guidelines, 
https://aspe.hhs.gov/2019-poverty-guidelines.
---------------------------------------------------------------------------
    Persistently low wages have left working people in 
precarious economic situations. An estimated 41 percent of 
American adults cannot afford a $400 emergency\39\ and minimum 
wage workers cannot afford a two-bedroom apartment in any part 
of the country.\40\ Mr. Wise testified about his experience 
earning the minimum wage at the February 7th hearing:
---------------------------------------------------------------------------
    \39\Board of Governors of the Federal Reserve System, Report on the 
Economic Well-Being of U.S. Households in 2017 21 (2018), https://
www.federalreserve.gov/publications/files/2017-report-economic-well-
being-us-households-201805.pdf.
    \40\Nat'l Low Income Housing Coal., Out of Reach: The High Cost of 
Housing 1 (2018), https://reports.nlihc.org/sites/default/files/oor/
OOR_2018.pdf; Tracy Jan, A Minimum-Wage Worker Can't Afford a 2-Bedroom 
Apartment Anywhere in the U.S., Washington Post (Jun. 13, 2018), 
https://www.washingtonpost.com/news/wonk/wp/2018/06/13/a-minimum-wage-
worker-cant-afford-a-2-bedroom-apartment-anywhere-in-the-u-s/
?utm_term=.4689024537a1.

          [I]t is frightening, because we are truly one missed 
        paycheck away from being homeless. So there is no such 
        thing as being sick or having to call in or a family 
        emergency. Refrigerator breaking down, car breaks, any 
        of that going out is catastrophic, basically, for me 
        and my family. So it is just it is all pure luck, you 
        know, hoping everything is okay every day.\41\
---------------------------------------------------------------------------
    \41\Gradually Raising the Minimum Wage to $15: Good for Workers, 
Good for Businesses, and Good for the Economy Before H. Comm. on Educ. 
and Labor, 116th Cong. (2019) (written testimony of Terrence Wise, 
Shift Manager, McDonalds) [Hereinafter Wise Testimony]. See also House 
Comm. on Educ. and Labor, Gradually Raising the Minimum Wage to $15: 
Good for Workers, Good for Business, Good for the Economy, YouTube 
(Feb. 7, 2019), https://www.youtube.com/watch?v=JDGkim7aaHI (statement 
by Mr. Wise at 3:08:20).
---------------------------------------------------------------------------

 H.R. 582 WOULD RESTORE THE VALUE OF THE MINIMUM WAGE THROUGH GRADUAL 
                STEPS IN LINE WITH HISTORICAL INCREASES

    Gradually raising the minimum wage to $15 by 2024 pursuant 
to H.R. 582 is a key step toward restoring the value of the 
minimum wage and correcting past failures to increase it. H.R. 
582 would restore the minimum wage, putting it 28 percent above 
the peak minimum wage in 1968. The Act would finally ensure the 
minimum wage is no longer a poverty level wage.\42\ As Dr. 
Zipperer explained at the February 7th hearing, ``[a] $15 wage 
in 2024 would have 28 percent more purchasing power than the 
minimum wage did at its 1968 high point, but over that time 
period, the economy's potential for higher living standards, as 
reflected in labor productivity, will have grown by 119 
percent.''\43\ H.R. 582 would also lift the minimum wage's 
share of the full-time, full-year median wage to anywhere 
between 56 to 58 percent and finally begin to close the gap 
between typical workers and minimum wage workers.\44\
---------------------------------------------------------------------------
    \42\The federal poverty guidelines are adjusted at the rate of 
inflation each year using the CPI-U. Thus, the poverty line will be the 
same as today in real terms ($16,910 for a family of two) as in 2024. 
Meanwhile, today's real value of a $15 minimum wage in 2024 is 
approximately $13, resulting in earnings of about $27,040 per year for 
full-time work; See also U.S. Dep't of Health and Human Servs., 
Frequently Asked Questions Related to Poverty Guidelines and Poverty, 
https://aspe.hhs.gov/frequently-asked-questions-related-poverty-
guidelines-and-poverty.
    \43\Zipperer Testimony at 3.
    \44\David Cooper, Raising the Minimum Wage to $15 by 2024 Would 
Lift Pay for Nearly 40 Million American Workers 7 (2019), https://
www.epi.org/files/pdf/160909.pdf.
---------------------------------------------------------------------------
    H.R. 582 restores the value of the minimum wage through 
increases well within the ranges of past increases. As Table 1 
demonstrates, year-over-year increases in the federal minimum 
wage have ranged from 5 percent in 1975 to 47 percent in 1950. 
Historically, the average one-year increase to the minimum wage 
was 14 percent. As Table 1 shows, 17 of the 22 increases were 
greater than 9 percent, which is the smallest one-year 
percentage increase (in year 2024) under H.R. 582. For the 
seven times in the last 80 years where more than five years 
passed between minimum wage increases, the average one-year 
increase was 17 percent. The largest one-year percentage 
increase under H.R. 582 would be 18 percent in 2019.

 RAISING THE FEDERAL MINIMUM WAGE IMPROVES WORKERS' ECONOMIC SECURITY 
            WITH LITTLE TO NO NEGATIVE IMPACT ON EMPLOYMENT

Minimum wage increases raise workers' income, narrow race and gender 
        pay gaps, and reduce poverty rates

    Raising the federal minimum wage broadly increases family 
incomes for low-wage workers. Economists at the University of 
Massachusetts\45\ and the U.S. Census Bureau found that low-
income families experienced large and economically meaningful 
earnings and income boosts after minimum wage increases.\46\ 
They found that these income-increasing effects grew in 
magnitude up to five years after the policy change.\47\
---------------------------------------------------------------------------
    \45\Arindrajit Dube, Minimum Wages and the Distribution of Family 
Incomes 3 (2018), https://equitablegrowth.org/wp-content/uploads/2018/
11/11162018-WP-MINIMUM-WAGES-AND-FAMILY-INCOMES.pdf.
    \46\Kevin Rinz & John Voorhies, The Distributional Effects of 
Minimum Wages: Evidence from Linked Survey and Administrative Data 5 
(2018), https://www.census.gov/content/dam/Census/library/working-
papers/2018/adrm/carra-wp-2018-02.pdf.
    \47\Id.
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    Raising the federal minimum wage also impacts gender and 
racial pay gaps. Six in ten workers earning the current federal 
minimum wage are women.\48\ Women on average earn 80 cents for 
every dollar earned by their male counterparts.\49\ Evidence 
from the states shows that raising the minimum wage can have an 
impact on the gender pay gap. In states where the minimum wage 
is at or above $8.25 an hour, the gender wage gap is 41 percent 
smaller than states where the minimum wage is lower.\50\ 
Similarly, analysts estimate that today, there is a 25 percent 
gap between the average annual earnings of African American and 
White workers.\51\ Researchers found that the 1966 expansion of 
federal minimum wage protections to industries predominantly 
filled with workers of color, which resulted in a wage increase 
for many of these workers, reduced the black-white earnings gap 
by 20 percent.\52\
---------------------------------------------------------------------------
    \48\Nat'l Women's Law Ctr., The Raise the Wage Act: Boosting 
Women's Paychecks and Advancing Equal Pay 1 (2019), https://nwlc-
ciw49tixgw5lbab.stackpathdns.com/wp-content/uploads/2019/02/Raise-the-
Wage-Act-Boosting-Womens-Pay-Checks.pdf.
    \49\Am. Assoc. of Univ. Women, The Simple Truth About the Gender 
Pay Gap 5 (2018), https://www.aauw.org/aauw_check/pdf_download/
show_pdf.php?file=The_Simple_Truth.
    \50\Nat'l Women's Law Ctr., Higher Minimum Wages Promote Equal Pay 
for Women 1 (2017), https://nwlc.org/wp-content/uploads/2017/04/2017-
Higher-State-Minimum-Wages-Promote-Equal-Pay-for-Women.pdf.
    \51\Elora Derenoncourt & Claire Montialoux, Minimum Wages and 
Racial Inequality 1 (2018), https://scholar.harvard.edu/files/
elloraderenoncourt/files/montialoux_jmp_2018.pdf.
    \52\Id.
---------------------------------------------------------------------------
    Higher minimum wages also reduce poverty rates. For every 
10 percent increase in the minimum wage, research finds a 5 
percent reduction in the nonelderly poverty rate over the long 
run (three or more years).\53\ These findings suggest that if 
the United States had a $12 national minimum wage in 2017, 
there would be about 6.2 million fewer individuals living in 
poverty today.\54\ Furthermore, the most comprehensive 
assessment of the effect of the minimum wage on family incomes 
finds that every 10 percent increase in the inflation-adjusted 
minimum wage reduces Black and Hispanic poverty rates by 
approximately 10.9 percent.\55\
---------------------------------------------------------------------------
    \53\Arindrajit Dube, Minimum Wages and the Distribution of Family 
Incomes 23 (2018), https://equitablegrowth.org/wp-content/uploads/2018/
11/11162018-WP-MINIMUM-WAGES-AND-FAMILY-INCOMES.pdf; Washington Ctr. 
for Equitable Growth, Minimum wages and the distribution of family 
incomes in the United States (April 26, 2017), https://
equitablegrowth.org/minimum-wages-and-the-distribution-of-family-
incomes-in-the-us/.
    \54\Id at 28.
    \55\Ben Zipperer, The Erosion of the Federal Minimum Wage has 
Increased Poverty, Especially for Black and Hispanic Families, Econ. 
Snapshot (Jun. 13, 2018), https://www.epi.org/publication/the-erosion-
of-the-federal-minimum-wage-has-increased-poverty-especially-for-black-
and-hispanic-families/.
---------------------------------------------------------------------------
    Analysis shows that gradually raising the federal minimum 
wage to $15 by 2024 under H.R. 582 would increase wages for 
39.7 million working people (26.6 percent of the workforce) and 
produce $118 billion in additional wages through 2024.\56\ It 
would directly lift the wages of 28.1 million workers.\57\ For 
those 28.1 million workers, this translates into a nearly 
$4,000 increase in annual wage income, a 20.9 percent 
raise.\58\ Another 11.6 million workers would indirectly 
benefit from a spillover effect as employers increase wages for 
workers making slightly more than $15 in order to attract and 
retain workers.\59\
---------------------------------------------------------------------------
    \56\David Cooper, Raising the Minimum Wage to $15 by 2024 Would 
Lift Pay for Nearly 40 Million American Workers 2 (2019), https://
www.epi.org/files/pdf/160909.pdf.
    \57\Id. at 3.
    \58\Id.
    \59\Id. at 9.
---------------------------------------------------------------------------
    Millions of full-time workers between the ages of 25 and 
54, many of whom are the primary breadwinners for their 
families, would see a raise under H.R. 582.\60\ Ninety percent 
of the workers who would see a raise are over the age of 20 and 
more than half of all affected workers are prime-age workers 
between the ages of 25 and 54.\61\ In fact, among affected 
workers, the average age is 35 years old.\62\ Women, though not 
quite a majority of the overall workforce, represent 57.9 
percent of workers affected by a $15 minimum wage in 2024 under 
H.R. 582.\63\ H.R. 582 would have a particular impact on 
workers of color. Nearly 36 percent of working women of color 
would be impacted by a $15 minimum wage in 2024,\64\ including 
African American and Latina women, who are overrepresented in 
low-paying jobs\65\ and most likely to be paid the lowest 
wages.\66\ Thirty-eight percent of all African American workers 
and 33.4 percent of all Hispanic workers will be impacted.\67\
---------------------------------------------------------------------------
    \60\Id. at 11.
    \61\Id. at 9.
    \62\Id.
    \63\Id.
    \64\David Cooper, Raising the Minimum Wage to $15 by 2024 Would 
Lift Pay for Nearly 40 Million American Workers 9 (2019), https://
www.epi.org/files/pdf/160909.pdf.
    \65\Irene Trung et al., The Growing Movement for $15 1 (2015), 
http://www.nelp.org/content/uploads/Growing-Movement-for-15-
Dollars.pdf.
    \66\Id.
    \67\David Cooper, Raising the Minimum Wage to $15 by 2024 Would 
Lift Pay for Nearly 40 Million American Workers 9-10 (2019), https://
www.epi.org/files/pdf/160909.pdf.
---------------------------------------------------------------------------
    Workers with families who will benefit from a $15 minimum 
wage in 2024 are typically the primary breadwinner for their 
families; they earn an average of 51.9 percent of their 
family's total income.\68\ The effects for single working 
parents are more dramatic: ``43.0 percent of all single mothers 
would receive a raise if the federal minimum wage were 
increased to $15 by 2024, as would nearly a third (29.4 
percent) of single fathers.''\69\ The parents of 14.4 million 
children across the United States, nearly one-fifth (19.6 
percent) of all U.S. children, would see increased wages under 
H.R. 582.\70\
---------------------------------------------------------------------------
    \68\Id. at 11.
    \69\Id. at 12.
    \70\David Cooper, Raising the Minimum Wage to $15 by 2024 Would 
Lift Wages for Nearly 40 Million American Workers 12 (2019), https://
www.epi.org/files/pdf/160909.pdf.
---------------------------------------------------------------------------

Past minimum wage increases have had little or no negative impact on 
        employment

    The most prevalent and consistent criticism of raising the 
minimum wage is that it will lead to job loss, or negative 
employment effects. However, neither the evidence nor the 
experiences from recent state and local increases support this 
claim. As Dr. Zipperer testified at the February 7th hearing, 
``the weight of recent evidence shows that minimum wages have 
worked exactly as intended, by raising wages without 
substantial negative consequences on employment.''\71\ A 2019 
paper, considered to be the most important economic study on 
the minimum wage since the 1990s, analyzed 138 state-level 
minimum wage increases:\72\ ``[W]e studied all major state-
level minimum wage increases between 1979 and 2016 and found 
they significantly raised wages without reducing the employment 
of low-wage workers. Notably, we also found the same positive 
outcomes for even the highest minimum wages in our study.''\73\ 
Additionally, researchers have found that requiring that tipped 
workers be paid the full regular minimum wage has had no 
discernable effect on leisure and hospitality employment growth 
in the seven states where tipped workers receive the full, 
regular minimum wage.\74\ Further, the evidence from six large 
cities that were early adopters of higher minimum wages 
(Chicago, the District of Columbia, Oakland, San Francisco, San 
Jose, and Seattle) shows that following pay increases for 
workers in food service, employment did not change, and 
employers did not replace these workers with more-educated 
workers.\75\
---------------------------------------------------------------------------
    \71\Zipperer Testimony at 4.
    \72\Doruk Cengiz et al., The Effect of Minimum Wages on Low-Wage 
Jobs: Evidence from the United States Using a Bunching Estimator 1 
(2019), https://www.nber.org/papers/w25434.pdf.
    \73\Zipperer Testimony at 5.
    \74\Sylvia Allegretto & David Cooper, Twenty-Three Years and Still 
Waiting for Change: Why It's Time to Give Tipped Workers the Regular 
Minimum Wage 4 (2014), https://www.epi.org/files/2014/EPI-CWED-
BP379.pdf.
    \75\Reich testimony at 11.
---------------------------------------------------------------------------
    In July 2019, the Congressional Budget Office (CBO) 
released a report analyzing the employment and family income of 
a minimum wage proposal similar the H.R. 582.\76\ CBO also 
analyzed the impacts of federal minimum wage increases to $12 
by 2025 and $10 by 2025. CBO estimated that gradually raising 
the minimum wage to $15 would increase earnings for up to 27.3 
million workers in 2025, boost annual family income by hundreds 
of dollars per year on average for families with income below 
three times the federal poverty line, reduce income inequality, 
and lift 1.3 million Americans--including 600,000 children--out 
of poverty. Simultaneously, CBO predicted the policy would 
decrease number of workers employed in any given week by 1.3 
million in 2025. However, CBO's approach should not be applied 
to H.R. 582. To arrive at its employment estimate, CBO states 
that it synthesized results from multiple research studies, 
some of which used high-quality, credible methods, but many of 
which were methodologically flawed.\77\ CBO also overlooked the 
fact that the vast majority of rigorous research from labor 
economists, particularly more recent studies that take 
advantage of significant state-level variation in minimum 
wages, finds minimal or no negative effects on employment when 
raising the minimum wage and multiple recent studies even find 
positive effects.\78\
---------------------------------------------------------------------------
    \76\Like H.R. 582, CBO's $15 scenario would raise wages with five 
annual increases, and thereafter index the minimum wage to median wage 
growth. Similarly, CBO's scenario would also phase out exemptions for 
tipped workers, workers with disabilities, and teens. However, CBO 
assumes the first wage increase will take effect in 2020 rather than 
2019. Cong. Budget Office, The Effects on Employment and Family Income 
of Increasing the Federal Minimum Wage (July 8, 2019), https://
www.cbo.gov/publication/55410.
    \77\Heidi Shierholz, CBO report shows broad benefits from higher 
minimum wage (July 9, 2019), https://www.epi.org/press/cbo-report-
shows-broad-benefits-from-higher-minimum-wage/.
    \78\Dale Belman & Paul Wolfson, What Does the Minimum Wage Do? 15 
(2014), https://research.upjohn.org/cgi/
viewcontent.cgi?filename=0&article=1245&context=up_press&type=additional
; Shierholz, CBO report shows broad benefits from higher minimum wage 
(2019).
---------------------------------------------------------------------------
    While a 2017 University of Washington analysis of the first 
stage of Seattle's minimum wage increase to $15 concluded that 
the increase resulted in large employment losses,\79\ the study 
drew wide criticism for its methodology, including but not 
limited to: its reliance on a single case study; its inability 
to properly statistically control for Seattle's booming economy 
during the time of the study; and failure to account for 
businesses with multiple locations, which excluded an estimated 
40 percent of the impacted workforce.\80\ Notably, the study's 
results imply that Seattle's minimum wage increase was the 
cause of a large increase in the number of jobs paying more 
than $19 per hour an implausible result, given that the minimum 
wage had increased to only $13 during the authors' period of 
study.\81\ In 2018, the study's authors issued a revised 
version that walked back the study's strong conclusions, 
although many labor economists have remaining methodological 
criticisms.\82\
---------------------------------------------------------------------------
    \79\Ekaterina Jardim et. al, Minimum Wage Increases, Wages, and 
Low-Wage Employment: Evidence from Seattle, 38 (2018), https://
www.nber.org/papers/w23532.pdf.
    \80\Gradually Raising the Minimum Wage to $15: Good for Workers, 
Good for Businesses, and Good for the Economy Before H. Comm. on Educ. 
and Labor, 116th Cong. (2019) (written testimony of Michael Reich, 
Professor, University of California) [Hereinafter Reich Testimony]. See 
also Josh Hoxie, The Seattle Minimum Wage Study is Utter B.S., Fortune 
(Jun. 27, 2017), http://fortune.com/2017/06/27/seattle-minimum-wage-
study-results-impact-15-dollar-uw/; Ben Zipperer & John Schmitt, The 
`High Road' Seattle Labor Market and the Effects of the Minimum Wage 
Increase 8 (2017), https://www.epi.org/files/pdf/130743.pdf.
    \81\Ben Zipperer & John Schmitt, The `High Road' Seattle Labor 
Market and the Effects of the Minimum Wage Increase 4 (2017), https://
www.epi.org/files/pdf/130743.pdf.
    \82\Noam Scheiber, They Said Seattle's Higher Base Pay Would Hurt 
Workers. Why Did They Flip?, New York Times (Oct. 22, 2018), https://
www.nytimes.com/2018/10/22/business/economy/seattle-minimum-wage-
study.html.
---------------------------------------------------------------------------
    Moreover, estimates that singularly focus on job loss or 
other negative employment effects ignore the evidence that 
working people overwhelmingly benefit when there is an increase 
in the minimum wage. Dr. Zipperer's testimony at the February 
7th hearing noted that: ``The benefits of a $15 minimum wage in 
2024 for workers, their families, and their communities will 
far outweigh any potential costs of the policy.''\83\ Indeed, 
CBO's 2014 analysis found that raising the minimum wage lifted 
nearly 1 million workers out of poverty and even the revised 
2018 Seattle case study found that minimum wage workers on 
average netted a pre-tax increase of $10 an hour per week.
---------------------------------------------------------------------------
    \83\Zipperer Testimony at 5.
---------------------------------------------------------------------------
    Furthermore, focusing on a static estimate such as job 
losses ignores the high degree of worker ``churn'' in the low-
wage labor market, giving the misleading impression that the 
result of higher minimum wages is that a given pool of workers 
would lose their jobs, find no replacement, and have no 
earnings over an entire year.\84\ By contrast, research on the 
nature of low-wage work shows that higher minimum wages may 
reduce hours worked and marginally increase time between jobs, 
but generally do not lead to loss of entire jobs. Moreover, the 
impact of lost hours and increased time between jobs are spread 
across a large number of affected workers, each of whom work a 
little less but earn more during the year overall.\85\ In other 
words, a study finding any ``total reduction in employment'' 
(job loss) is in reality likely uncovering that workers may 
work several fewer hours during a week, but they still take 
home more pay due to an increase in the minimum wage.
---------------------------------------------------------------------------
    \84\David Cooper et al., Bold Increases in the Minimum Wage Should 
be Evaluated for the Benefits of Raising Low-wage Workers' Total 
Earnings 2 (2018), https://www.epi.org/files/pdf/143838.pdf.
    \85\Id.
---------------------------------------------------------------------------

    MINIMUM WAGE INCREASES ARE LINKED WITH IMPROVED SOCIAL OUTCOMES

    Raising the minimum wage is also associated with positive 
social outcomes, including better health outcomes for working 
adults, infants, and children. As Massachusetts State 
Representative Paul Brodeur testified at the February 7th 
hearing:

          The secondary, and in some cases tertiary benefits of 
        raising the minimum wage are clear. Issues such as food 
        insecurity, improved childhood health statistics, 
        reduced employment turnover, and other factors have 
        emerged as having been largely effected by these 
        [minimum wage] increases. For example, a 2016 report by 
        the Century Foundation estimated that the increase to a 
        $15 minimum wage would decrease food insecurity in the 
        Commonwealth [of Massachusetts] by 7% as 18,000 
        households would no longer be food insecure. We expect 
        these trends to continue.\86\
---------------------------------------------------------------------------
    \86\Gradually Raising the Minimum Wage to $15: Good for Workers, 
Good for Businesses, and Good for the Economy Before H. Comm. on Educ. 
and Labor, 116th Cong. (2019) (written testimony of Paul A. Brodeur, 
State Representative 32nd Middlesex District Commonwealth of 
Massachusetts House of Representatives, at 3) [Hereinafter Brodeur 
Testimony].

    In adults, studies strongly correlate increases in minimum 
wages with increases in overall health and fewer illness-
induced absences from work.\87\ Researchers found that 
increases in state minimum wages have been linked to decreased 
smoking,\88\ particularly among women in low wage work.\89\ 
Additionally, with higher wages, workers have access to health 
options that increase quality of life and longevity, including 
the ability to afford healthier food.\90\ Researchers have also 
linked a $15 minimum wage to a 4 to 8 percent reduction in 
premature deaths among low-income populations in New York 
City.\91\
---------------------------------------------------------------------------
    \87\J. Paul Leigh & Juan Du, Effects of Minimum Wages on Population 
Health 5 (2018), https://www.healthaffairs.org/do/10.1377/
hpb20180622.107025/full/HPB_2018_RWJF_06_W.pdf.
    \88\Id.
    \89\Id.
    \90\Steven H. Woolf et al., How Are Income and Wealth Linked to 
Health and Longevity? 5 (2015), https://www.urban.org/sites/default/
files/publication/49116/2000178-How-are-Income-and-Wealth-Linked-to-
Health-and-Longevity.pdf.
    \91\Tsu-Yu Tsao et al., Estimating Potential Reductions in 
Premature Mortality in New York City From Raising the Minimum Wage to 
$15, 106 Am. Journal of Pub. Health 1036 (2016).
---------------------------------------------------------------------------
    Raising the minimum wage will have a positive impact on 
children and families. Nearly one in five working mothers with 
children under the age of three work in low-wage jobs.\92\ 
Raising the minimum wage boosts families' disposable incomes 
and directly affects a caregiver's ability to provide a child 
with basic needs such as appropriate clothing, more food and 
nutrients, medical care, and better home conditions. This is 
particularly important for children growing up in single, 
female-headed households who are more likely to lack basic 
needs\93\ and indirectly experience toxic stress due to deep 
poverty.\94\ As Mr. Wise testified at the February 7th hearing:

    \92\Julie Vogtman, Nearly one in Five Working Mothers of Very Young 
Children Work in Low-Wage Jobs, Nat'l Women's Law Ctr. (Apr. 5, 2017), 
https://nwlc.org/blog/nearly-one-in-five-working-mothers-of-very-young-
children-work-in-low-wage-jobs/.
    \93\Kerri M. Raissian & Lindsey Rose Bullinger, Money Matters: Does 
the Minimum Wage Affect Child Maltreatment Rates, 72 Child and Youth 
Serv. Rev. 60, 65 (2017).
    \94\Nat'l Sci. Council on the Developing Child, The Timing and 
Quality of Early Experiences Combine to Shape Brain Architecture 8 
(2007), https://46y5eh11fhgw3ve3ytpwxt9r-wpengine.netdna-ssl.com/wp-
content/uploads/2007/05/Timing__Quality__Early__Experiences-1.pdf.
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          I often imagine what $15 an hour would mean for me 
        and my family. I wouldn't have to worry about providing 
        the basic necessities for my family. We could keep food 
        on the table. No one would have to worry about doing 
        homework in the dark. I could get them the school 
        supplies whenever they need them.\95\
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    \95\Wise Testimony at 3.

    Moreover, minimum wage increases are proven to reduce the 
risk of child maltreatment, particularly neglect. These effects 
are pronounced for young children under 5 years of age and 
school-aged children. Recently published research provides 
strong evidence that increasing the minimum wage by $1.00 would 
lead to an annual reduction of 9,700 child neglect reports to 
Child Protection Services.\96\
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    \96\Christopher Maynard, How Raising the Minimum Wage by $1 Could 
Reduce Cases of Child Neglect, Consumer Affairs (August 18, 2017), 
https://www.consumeraffairs.com/news/how-raising-the-minimum-wage-by-1-
could-reduce-cases-of-child-neglect-081817.html.
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    Increases in the federal minimum wage are also linked to 
improved health and economic outcomes for low-wage mothers and 
their babies. Researchers have found that infant mortality, low 
birth weight, and risk of poor health are greater for those 
babies born into families where the primary breadwinner earns 
the federal minimum wage or less.\97\ Researchers have found 
that a 10 percent increase in the minimum wage reduces infant 
mortality rates by 3.2 percent\98\ and that a $1.00 increase in 
the minimum wage increases birth weight significantly.\99\ A 
2016 study found that ``[i]f all states in 2014 had increased 
their minimum wages by one dollar there would have likely been 
an estimated 2,790 fewer low birth weight births and 518 fewer 
post neonatal deaths for the year.''\100\ Increases in income 
during pregnancy are also correlated with a number of positive 
effects for both maternal and babies' health including improved 
nutrition, lower financial stress, and greater prenatal 
care.\101\
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    \97\Kelli Komro, The Effect of an Increased Minimum Wage on Infant 
Mortality and Birth Weight, 106 Am. Journal of Pub. Health 1514, 1516 
(2016).
    \98\Ali Jalali, The Minimum Wage and Infant Mortality 14 (2018), 
https://static1.squarespace.com/static/5b79a2af9f8770250f45ab0c/t/
5bd7bb3e24a694466008aae9/1540864832308/JMP.pdf.
    \99\George Wehby et al., Effects of the Minimum Wage on Infant 
Health 4 (2018), https://www.nber.org/papers/w22373.pdf.
    \100\Kelli Komro, The Effect of an Increased Minimum Wage on Infant 
Mortality and Birth Weight, 106 Am. Journal of Pub. Health 1514, 1516 
(2016).
    \101\George Wehby et al., Effects of the Minimum Wage on Infant 
Health 3 (2016), https://www.nber.org/papers/w22373.pdf.
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    Research also demonstrates that increases in the minimum 
wage reduce recidivism by drawing individuals into the legal 
labor market rather than income-generating criminal activity 
(e.g., property crimes or selling illegal drugs). A 2018 study 
found that a minimum wage increase of $0.50 translates into a 
2.8 percent decrease in the probability of men and women 
returning to prison within one year.\102\ This decrease in 
recidivism can translate into savings in corrections costs for 
state and federal governments.
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    \102\Amanda Y. Agan & Michael D. Makowsky, The Minimum Wage, EITC, 
and Criminal Recidivism 15 (2018), https://www.nber.org/papers/
w25116.pdf.
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       RAISING THE FEDERAL MINIMUM WAGE BENEFITS LOCAL BUSINESSES

    Congress has long recognized the impact of the minimum wage 
on commerce, declaring in the FLSA's preamble that ``[l]abor 
conditions detrimental to the maintenance of the minimum 
standard of living necessary for health, efficiency, and 
general wellbeing of workers'' are harmful to the economy by 
burdening ``the free flow of goods.''\103\ Yet, efforts to 
raise the federal minimum wage are often met with concerns 
regarding impacts to businesses, including small and local 
businesses. As discussed below, research indicates businesses 
can absorb gradual minimum wage increases, without loss of 
profits or negative employment effects, through small price 
adjustments, partially offset by increased sales and decreased 
employee turnover costs.
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    \103\29 U.S.C. Sec.  202(a).
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Businesses adjust to minimum wage increases through slight price 
        increases without loss of profits

    Research shows that businesses absorb minimum wage 
increases primarily through relatively small price increases 
passed on to consumers as well as through reduced turnover and 
enhanced productivity among their workers. A 2018 U.C. Berkeley 
study of 884 restaurants in San Jose, California, following a 
25 percent minimum wage increase from $8 to $10 an hour did not 
find reduced employment. Instead, it found that restaurants 
absorbed higher labor costs by slightly increasing menu 
prices--1.45 percent on average--and through cost savings from 
lower employee turnover.\104\ Similarly, a 2017 Federal Reserve 
Bank of Boston analysis of 27 metropolitan statistical areas 
found that a 10 percent increase in the minimum wage increased 
prices on the whole by only 0.3 percent.\105\ Further, recent 
analysis on the impact of a $15 minimum wage by 2024 estimates 
that ``businesses could absorb the remaining payroll cost 
increases by increasing prices by 0.6 percent through 2024. 
This price increase is well below the annual inflation rate of 
1.7 percent over the past five years.''\106\
---------------------------------------------------------------------------
    \104\Sylvia Allegretto & Michael Reich, Are Local Minimum Wages 
Absorbed by Price Increases?Estimates from Internet-based Restaurant 
Menus 25 (2016),http://www.irle.berkeley.edu/files/2015/Are-Local-
Minimum-Wages-Absorbed-by-Price-Increases.pdf.
    \105\Daniel Cooper et al., The Local Aggregate Effects of Minimum 
Wage Increases 12 (2017), https://www.minneapolisfed.org/institute/
working-papers/wp17-25.pdf.
    \106\Michael Reich et al., The Employment Effects of a $15 Minimum 
Wage in the U.S. and in Mississippi: A Simulation Approach 5 (2019), 
http://irle.berkeley.edu/files/2019/02/The-Employment-Effects-of-a-15-
Minimum-Wage-in-the-US-and-in-Mississippi.pdf.
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Businesses and local economies benefit from increased spending by low-
        wage workers

    Minimum wage increases stimulate consumer spending and 
consumption, which helps offset price increases. A 2013 report 
estimated that a $1.75 increase in the hourly federal minimum 
wage could increase aggregate household spending by $48 
billion, or 0.3 percent of the Gross Domestic Product, in the 
year following the minimum wage hike.\107\ Similarly, a 2016 
report projected that a 10 percent increase in the minimum wage 
would increase national sales by $2 billion, or 1.1 percent, 
per year.\108\ A 2017 Federal Reserve Bank of Boston paper 
found that increases in minimum wages lead to nominal increases 
in food consumption both at and away from home.\109\ 
Specifically, the authors noted that a 10 percent minimum wage 
increase led to an increase in real spending on food away from 
home by about 0.5 percentage points.\110\ This same paper also 
found increased purchases in durable good purchases, such as 
cars, in advance of a change in the minimum wage.\111\
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    \107\Daniel Aaronson & Eric French, How Does a Federal Minimum Wage 
Hike Affect Aggregate Household Spending 3 (2013), https://www. 
chicagofed. org/publications/chicago-fed-letter/2013/august-313.
    \108\Cristian Alonso, Beyond Labor Market Outcomes: The Impact of 
the Minimum Wage on Nondurable Consumption 1-2 (2016), http://dx. doi. 
org/10. 2139/ssrn. 2818623.
    \109\Daniel Cooper et al., The Local Aggregate Effects of Minimum 
Wage Increases 3 (2017), https://www.minneapolisfed.org/institute/
working-papers/wp17-25.pdf.
    \110\Id.
    \111\Id.
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    Ms. Eckhouse, an Iowan small business owner, testified at 
the February 7th hearing on how increased spending and 
consumption from a minimum wage increase is important for 
sales:

          Workers in one business are the consumers for 
        another. Minimum wage increases put money in the hands 
        of people who most need to spend it--for car repairs 
        and new shoes for a child, or by not having to choose 
        between groceries and a medical bill. Increased minimum 
        wages mean increased consumer spending across all 
        businesses, helping other businesses grow.\112\
---------------------------------------------------------------------------
    \112\Gradually Raising the Minimum Wage to $15: Good for Workers, 
Good for Businesses, and Good for the Economy Before H. Comm. on Educ. 
and Labor, 116th Cong. (2019) (written testimony of Kathy Eckhouse 
Owner of La Quercia at 3) [Hereinafter Eckhouse Testimony].

    This powerful impact to economic growth from a small wage 
increase is due to the well-documented tendency of low-wage 
workers to spend their additional earnings. In 2012, economists 
found that immediately following a minimum wage hike, household 
income rose on average by about $250 per quarter; however, for 
households with minimum wage workers spending increased by 
roughly $700 per quarter.\113\ Mr. Wise testified at the 
February 7th hearing about how an increase to the minimum wage 
would mean he would more money in his community:
---------------------------------------------------------------------------
    \113\Daniel Aaronson et al., The Spending and Debt Response to 
Minimum Wage Hikes, 7 Am. Econ. Review 3111, 3125 (2012).

          With a $15 living wage, I could afford to take them 
        out to do something fun. Honestly, the last time I went 
        on a date with my fiance was to see the movie `Matrix'. 
        That was in 1999. Valentine's Day is next week and I 
        want to buy each of the women in my life some flowers . 
        . . [B]ut what would $15 really mean? It would mean my 
        daughters could meet their grandmother for the very 
        first time, because we could afford to travel to South 
        Carolina to visit her.\114\
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    \114\Wise Testimony at 3.

    Ms. Eckhouse made this point at the February 7th hearing: 
``[i]t's not raising the minimum wage that is a threat to 
business. It's stagnant wages, such as we've seen in recent 
decades, which weaken the consumer demand that businesses 
depend on to survive and grow.''\115\
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    \115\Eckhouse Testimony at 3.
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Businesses benefit from cost savings from decreased employee turnover

    As a result of the increase in the minimum wage, businesses 
also realize cost savings from lower employee turnover, which 
also offset price increases.\116\ A 2012 case study found that 
turnover of an individual employee costs businesses about one-
fifth of the employee's salary.\117\ A 2014 report found 
turnover rates for teenaged and restaurant workers fell 
substantially following a minimum wage increase, with most of 
the reductions coming within the first three quarters after the 
increase and without significant changes in employment 
levels.\118\ Specifically, the economists found that ``[f]or a 
10 percent minimum wage increase, turnover rates decline by 
around 2.0 percent for teenagers and 2.1 percent for the 
restaurant workforce.''\119\
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    \116\Arindrajit Dube et al., Minimum Wage Shocks, Employment Flows 
and Labor Market Frictions, 34 Journal of Labor Econs. 663-704, 664 
(2016).
    \117\Heather Boushey & Sarah Jane Glynn, There Are Significant 
Business Costs to Replacing Employees, Ctr. for Am. Progress (November 
16, 2012, 3:44 AM), https://www.americanprogress.org/issues/economy/
reports/2012/11/16/44464/there-are-significant-business-costs-to-
replacing-employees/.
    \118\Supra note 116 at 700.
    \119\Id.
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    Ms. Eckhouse's testimony at the February 7th hearing 
explained how businesses benefit from decreased employee 
turnover as a result of minimum wage increases:

          Employees new to our operation--or any operation--
        aren't as productive as long-term staff. They require 
        skills and training specific to us. It takes at least 
        three months for an employee to understand our 
        particular processes and be efficient, even those who 
        have worked in meat processing plants before. That's 
        just the beginning. It takes a year for true 
        proficiency; all jobs in all occupations require 
        familiarity and skill. We see more waste, more down 
        time, and more inefficiency on our production line with 
        newer staff. That's costly to us. And because turnover 
        is costly for all employers, reduced turnover is an 
        important benefit of raising the minimum wage.
          In addition, not spending time on a constant cycle of 
        rehiring and training frees us to look beyond the day-
        to-day to innovate and grow our business. It encourages 
        employees to be a part of that process, too, as they 
        develop new skills and techniques in our field, and 
        familiarity with what customers want.\120\
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    \120\Eckhouse Testimony at 2.

    A statement signed by over 800 businesses in support of 
raising the federal minimum wage to $15 by 2024 states, 
``[r]aising the minimum wage pays off in lower employee 
turnover, reduced hiring and training costs, lower error rates, 
increased productivity and better customer service. Employees 
often make the difference between repeat customers or lost 
customers.''\121\
---------------------------------------------------------------------------
    \121\Businesses for a Fair Minimum Wage, Federal Sign On Statement, 
https://www.businessforafairminimumwage.org/Federal-15-By-2024-Sign-On-
Statement (last visited Jun. 18, 2019).
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Minimum wage increases lead to government savings on public benefits

    Ensuring that workers have enough money to cover their 
basic needs can result in a reduction in public expenditures. 
For example, a 2014 report looking at the impacts of raising 
the minimum wage to $10.10 an hour on the Supplemental 
Nutrition Assistance Program (SNAP) found programmatic cost 
savings.\122\ The report estimated that raising the federal 
minimum wage to $10.10 per hour would lead to an annual 
decrease in program expenditures by nearly $4.6 billion (or 
about 6 percent of the SNAP program), leading to program 
savings of $46 billion over 10 years,\123\ and an increase to 
$12 per hour would save $53 billion over 10 years.\124\
---------------------------------------------------------------------------
    \122\Rachel West & Michael Reich, The Effects of Minimum Wages on 
SNAP Enrollments and Expenditures 5 (2014), https://
cdn.americanprogress.org/wp-content/uploads/2014/03/MinimumWage-
report.pdf.
    \123\Id.
    \124\Rachel West, The Murray-Scott Minimum-Wage Bill: A Win-Win for 
Working Families and Taxpayers, Ctr. for Am. Progress (Apr. 30, 2015, 
9:01 AM), https://www.americanprogress.org/issues/poverty/news/2015/04/
30/111808/the-murray-scott-minimum-wage-bill-a-win-win-for-working-
families-and-taxpayers/.
---------------------------------------------------------------------------
    Mr. Brodeur testified at the February 7th hearing regarding 
the impacts of raising wages on benefit programs in 
Massachusetts:

          [We] saw that the increased purchasing power, 
        increased taxable income, reduced caseloads in social 
        benefits programs, and growth in business confidence 
        and success were outcomes of our incremental increases 
        in the minimum wage.\125\
---------------------------------------------------------------------------
    \125\Brodeur Testimony at 3.

    Ms. Eckhouse testified at the February 7th hearing 
---------------------------------------------------------------------------
regarding the costs to public benefit programs:

          When businesses pay wages that are not enough to live 
        on, the costs of necessities like food and housing get 
        partly shifted to the community at large, to taxpayer-
        funded government assistance programs and food banks, 
        for example. It also means that our business is 
        subsidizing the profits of low-pay competitors. This is 
        not a fair or efficient way to run an economy.\126\
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    \126\Eckhouse Testimony at 2.
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  SUBMINIMUM WAGES UNDER THE FLSA CREATE INEQUITY FOR TIPPED WORKERS, 
              INDIVIDUALS WITH DISABILITIES, AND TEENAGERS

The tipped minimum wage leaves workers vulnerable

    Tipped workers are generally low-wage workers, earning 
about $6.50 per hour less (in 2016 dollars) than the median, 
hourly non-tipped worker and experiencing poverty at more than 
twice the rate of non-tipped workers.\127\ Tipped workers' 
earnings are often irregular and unpredictable, making it 
difficult to budget and plan. Compounding these challenges, 
research shows that tipping is often discriminatory, with both 
White and Black consumers discriminating against Black workers 
and leaving smaller tips than those left for White tipped 
workers.\128\
---------------------------------------------------------------------------
    \127\David Cooper, Valentine's Day is Better on the West Coast (at 
Least For Restaurant Servers), Working Econs. Blog (February 7, 2017, 
1:46 PM), https://www.epi.org/blog/valentines-day-is-better-on-the-
west-coast-at-least-for-restaurant-servers/.
    \128\Michael Lynn et al., Consumer Racial Discrimination in 
Tipping: A Replication and Extension 13 (2008), https://
www.wagehourlitigation.com/wp-content/uploads/sites/215/2015/10/
cornell.pdf.
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    Ms. Gupta testified at the February 7th hearing about how 
the origins of tipping are intertwined with the country's 
ongoing struggles with racial and gender inequality. Ms. Gupta 
noted that:

          [B]efore the Civil War, tipping was largely frowned 
        upon in the United States. But after its end, the 
        practice of tipping proliferated. At that time, the 
        restaurant and hospitality industry, exemplified by the 
        Pullman Company, hired newly freed slaves without 
        paying them base wages. The effect was to create a 
        permanent servant class, for whom the responsibility of 
        paying a wage was shifted from employers to 
        customers.\129\
---------------------------------------------------------------------------
    \129\Gradually Raising the Minimum Wage to $15: Good for Workers, 
Good for Businesses, and Good for the Economy Before H. Comm. on Educ. 
and Labor, 116th Cong. (2019) (written testimony of Vanita Gupta 
President and CEO of the Leadership Conference on Civil and Human 
Rights at 4) [Hereinafter Gupta Testimony].

    As first passed in 1938, the FLSA did not reference tips or 
tipped workers. ``Retail and service establishments,'' which 
have a high number of tipped workers, were not covered under 
the statute.\130\ In 1942, the U.S. Supreme Court affirmed the 
tipping model exemplified by Pullman workers, holding in 
Williams v. Jacksonville Terminal Co. that an employer may 
count an employee's tips as a credit against the employer's 
full obligation to pay the minimum wage.\131\ This policy 
continued to have a disproportionate impact on workers of 
color. By 1900, about 25 percent of all Black non-agricultural 
workers had jobs as servants or waiters, including the 
overwhelming majority of Black women.\132\ ``Having to depend 
on tipping kept African Americans in an economically and 
socially subordinate position.''\133\
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    \130\Fair Labor Standards Act of 1938, Pub. L. No. 75-718, 52 Stat. 
1060.
    \131\315 U.S. 386 (1942).
    \132\R. R. Wright, Jr., The Negro in Unskilled Labor, 49 The Annals 
of the Am. Acad. of Political and Soc. Scis. 19, 19-27 (1913).
    \133\Gupta Testimony at 4.
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    In 1966, Congress amended the FLSA to expand its coverage 
to hotels and restaurants, and it included ``tip credit'' 
provisions for the first time.\134\ Under section 3(m) of the 
FLSA, an employer may pay a ``tipped employee''\135\ a cash 
wage that is less than the full federal minimum wage, as long 
as the combination of tips and the cash wage from the employer 
equals the federal minimum wage. A ``tip credit'' is the amount 
from employee tips that an employer may count against its 
liability for the required payment of the full federal minimum 
wage.\136\ The first tip credit was established as part of the 
1966 FLSA amendments, which set the cash wage, also known as 
the tipped minimum wage, to 50 percent of the minimum wage. 
Over the next three decades, this percent ranged from 50 to 60 
percent of the minimum wage.\137\ In 1996, however, Congress 
decoupled the tipped minimum wage from the minimum wage, 
locking the cash wage at $2.13 per hour.\138\ There has not 
been an increase in the tipped minimum wage in 28 years.\139\
---------------------------------------------------------------------------
    \134\Fair Labor Standards Amendments of 1966, Pub. Law No. 89-601, 
80 Stat. 830 (current version at 29 U.S.C. Sec. 201, et seq.).
    \135\To be considered a tipped employee, an employee must be 
``engaged in an occupation in which he customarily and regularly 
receives more than $30 a month in tips.'' 29 U.S.C. Sec. 203(t).
    \136\Prior to 1996, the employer cash wage and tip credit were set 
as a percentage of the minimum wage. The percentage ranged from 40 to 
55 percent of the minimum wage.
    \137\In 1979, the tipped minimum wage was set to 55 percent of the 
minimum wage (Fair Labor Standards Amendments of 1977, Pub. L. No. 95-
151). In 1980, the tipped minimum wage was set to 60 percent of the 
minimum wage (the Fair Labor Standards Amendments of 1977, Pub. L. No. 
95-151). In 1990, the tipped minimum wage was set to 55 percent of the 
minimum wage (Fair Labor Standards Amendments of 1989, Pub. L. No. 101-
157). In 1991, the tipped minimum wage was set to 50 percent of the 
minimum wage (Fair Labor Standards Amendments of 1989, Pub. L. No. 101-
157).
    \138\Small Business Job Protection Act of 1996, Pub. L. No. 104-
188, 110 Stat. 1755.
    \139\From inception to 1996, the tipped wage was set as a 
percentage of the full minimum wage. In 1996, the tipped wage was 
decoupled from the minimum wage and set as a fixed amount.
---------------------------------------------------------------------------
    Of the approximately five million tipped workers, an 
estimated four million tipped employees work in areas where 
employers are permitted to take a tip credit.\140\ An estimated 
one million tipped employees work in the seven states (Alaska, 
California, Minnesota, Montana, Nevada, Oregon, and Washington) 
often referred to as ``equal treatment states'' that prohibit 
employers from using a tip credit and require tipped employees 
be paid the full statutory state or federal minimum wage, 
whichever is greater. Seventeen states require a cash wage that 
is equal to the federal rate of $2.13 per hour.\141\ Twenty-six 
states and the District of Columbia set a tipped minimum wage 
that is greater than the federal rate of $2.13 per hour.\142\
---------------------------------------------------------------------------
    \140\There is no definitive count of the number of tipped 
employees. The Current Population Survey (CPS), which is typically used 
to study minimum wage and related labor issues, does not contain an 
identifier for tipped workers. Rather, the CPS includes a variable 
identifying individuals as receiving ``overtime pay, tips, or 
commissions.'' While this is not specific enough to determine the 
tipped status of any given respondent in the CPS, most researchers in 
this area have tended to use the CPS as a starting point by identifying 
individuals in the CPS reporting high shares of tips, overtime, or 
commissions. Based on calculations from the Congressional Research 
Service, an estimated 5.1 million workers are in occupations typically 
considered ``predominantly tipped'' occupations. An estimated 1.05 
million tipped employees work in the seven states that have prohibited 
use of a tip credit. Estimates are based on BLS Occupational Employment 
Statistics (OES) data for 2017.
    \141\Twelve states require a cash wage of $2.13 an hour by state 
law or by reference to federal law: Georgia, Indiana, Kansas, Kentucky, 
Nebraska, New Jersey, New Mexico, North Carolina, Texas, Utah, 
Virginia, and Wyoming. Five states have no state minimum wage: Alabama, 
Louisiana, Mississippi, South Carolina, and Tennessee. Wage and Hour 
Division, Minimum Wages for Tipped Employees (January 1, 2019), https:/
/www.dol.gov/whd/state/tipped.htm.
    \142\Id.
---------------------------------------------------------------------------
    Research demonstrates that tipped workers fare better in 
the seven states that prohibit employers from taking a tip 
credit. Tipped workers in these states that have eliminated the 
tipped subminimum wage earn about 15 percent more per hour than 
workers receiving $2.13 as a cash wage.\143\ Data also show 
that customers in equal treatment states continue to tip. In 
fact, a higher percentage of customers tip in Washington State 
(an equal treatment state) than in New York State (a state that 
allows employers to take a tip credit), and customers in Alaska 
(an equal treatment state) leave the highest average tip among 
all 50 states.\144\ Poverty rates for tipped workers, 
especially waitstaff and bartenders, in equal treatment states 
are lower than states with a $2.13 tipped minimum wage.\145\ 
Tipped occupations in equal treatment states also have a 23 
percent smaller gender wage gap compared to states with a $2.13 
tipped minimum cash wage.\146\
---------------------------------------------------------------------------
    \143\Elise Gould & David Cooper, Seven Facts about Tipped Workers 
and the Tipped Minimum Wage, Working Econs. Blog (May 31, 2018, 4:40 
PM), https://www.epi.org/blog/seven-facts-about-tipped-workers-and-the-
tipped-minimum-wage/.
    \144\Roberto A. Ferdman, Which US States Tip the Most (and Least), 
as Shown by Millions of Square Transactions, Quartz (March 21, 2014), 
https://qz.com/189458/the-united-states-of-tipping/.
    \145\Elise Gould & David Cooper, supra note 143.
    \146\Nat'l Women's Law Ctr., The Raise the Wage Act: Boosting 
Women's Paychecks and Advancing Equal Pay 2 (2017), https://nwlc-
ciw49tixgw5lbab.stackpathdns.com/wp-content/uploads/2019/02/Raise-the-
Wage-Act-Boosting-Womens-Pay-Checks.pdf.
---------------------------------------------------------------------------
    Research also shows that increases in the tipped minimum 
wage do not have negative effects on employment in full-service 
restaurants or on the number of full-service restaurants.\147\ 
In fact, analysis of employment and establishment data from 
equal treatment states shows that between 2011 and 2014, the 
number of full-service restaurants grew by 6.0 percent in equal 
treatment states compared to 4.1 percent growth in states with 
separate, lower tipped minimum wages.\148\ In the same period, 
employment in full-service restaurants grew 13.2 percent in 
equal treatment states compared to 9.1 percent in non-equal 
treatment states.\149\ Additionally, from January 1995 to May 
2014, employment in the leisure and hospitality sector, which 
employs a high percentage of tipped workers, grew 43.2 percent 
in the seven equal treatment states, compared with 39.2 percent 
growth in non-equal treatment states.\150\
---------------------------------------------------------------------------
    \147\Michael Lynn & Christopher Boone, Have Minimum Wage Increases 
Hurt the Restaurant Industry? The Evidence Says No! 3-13 (2015), 
https://scholarship.sha.cornell.edu/cgi/
viewcontent.cgi?article=1000&context=chrreports.
    \148\Elise Gould & David Cooper, supra note 143.
    \149\Id.
    \150\Sylvia Allegretto & David Cooper, Twenty-three Years and Still 
Waiting for Change 18 (2014), https://www.epi.org/files/2014/EPI-CWED-
BP379.pdf.
---------------------------------------------------------------------------
    Proponents of keeping the tip credit argue that because 
employers are obligated to ensure tipped employees are always 
making the full federal minimum wage, there is no need to 
change the system. However, the complexity of the two-tier wage 
system can be confusing and burdensome for employers, making 
compliance and enforcement difficult. Too often, employers, 
through error or outright wage theft, fail to make up the 
difference and ensure their workers are making the full minimum 
wage. According to a 2014 report, more than 1 in 10 of surveyed 
workers in predominantly tipped occupations report they 
received hourly wages, including tips, below the full federal 
minimum wage.\151\ A compliance sweep of nearly 9,000 full-
service restaurants by the U.S. Department of Labor's (DOL) 
Wage and Hour Division (WHD) from 2010 to 2012 found 83.8 
percent of investigated restaurants had some type of violation; 
WHD found 1,170 tip credit violations that resulted in nearly 
$5.5 million in back wages.\152\
---------------------------------------------------------------------------
    \151\The Nat'l Econ. Council et al., The Impact of Raising the 
Minimum Wage on Women, and the Importance of Ensuring a Robust Tipped 
Minimum Wage 2 (2014), https://obamawhitehouse.archives.gov/sites/
default/files/docs/20140325minimumwageandwomenreportfinal.pdf.
    \152\Sylvia A. Allegretto, Should New York State Eliminate its 
Subminimum Wage? 11 (2018), http://irle.berkeley.edu/files/2018/04/
Should-New-York-State-Eliminate-its-Subminimum-Wage.pdf.
---------------------------------------------------------------------------
    In November 2018, the Trump Administration rescinded 
guidance that prohibited employers from using a tip credit for 
employees who spend more than 20 percent of their time 
performing duties incidental to the tipped employee's regular 
duties and that are not by themselves directed toward producing 
tips. This rescinded guidance was designed to ensure that 
employers could not evade minimum wage requirements by having 
tipped workers perform work that a non-tipped worker would 
normally perform. The rollback of this guidance will allow 
employers to more often make use of a tip credit, making 
workers more vulnerable to wage theft.

The subminimum wage for individuals with disabilities is a vestige of 
        the discriminatory past

    Section 14(c) of the FLSA allows employers and 
organizations to apply to DOL for special certificates to pay 
individuals with disabilities at wages less than the minimum 
wage and less than the prevailing wage. There is no minimum 
wage requirement for employers hiring an individual with a 
disability under 14(c) certificates. More than half of these 
employees earn $2.50 an hour or less.\153\ Eliminating 
subminimum wage certificates for individuals with disabilities 
will create opportunities for individuals with disabilities to 
be competitively employed, taxpaying citizens and participate 
more fully in their communities. Furthermore, the use of these 
certificates is on the decline. A GAO review of 14(c) 
certificate holders in 2001 found over 5,600 employers 
nationwide utilized 14(c) certificates for 424,000 
workers.\154\ In July 2018, there were less than 200,000 
workers with disabilities paid subminimum wages.\155\
---------------------------------------------------------------------------
    \153\Gov't Accountability Office, Special Minimum Wage Program: 
Centers Offer Employment and Support Services to Workers with 
Disabilities, but Labor Should Improve Oversight 4 (2001), https://
www.gao.gov/new.items/d01886.pdf.
    \154\Id.
    \155\Dep't of Labor, 14(c) Certificate Holders, https://
www.dol.gov/whd/workerswithdisabilities/certificates.htm.
---------------------------------------------------------------------------
    In 1938, when Section 14(c) of the FLSA was enacted, 
individuals with disabilities were predominantly housed in 
institutions and viewed as unable to learn or function 
independently. There were no statutory requirements to support 
individuals with disabilities in the workplace, and individuals 
with disabilities did not have legal protections from 
discrimination. Today, individuals with disabilities are 
trained to enter the workforce alongside their peers. Federal 
policy now makes a presumption of ability, reflecting advances 
in research and a better understanding of disability. This 
presumption of ability, paired with improvements in technology 
and support for access to such technology, empowers individuals 
with disabilities to be as productive as their peers. Section 
14(c) is the only remaining vestige of the outdated model and 
the presumption of inability in federal policy.
    Since 1990, the Americans with Disabilities Act of 1990 
(ADA) has defined disability discrimination as the failure to 
provide a reasonable accommodation to a person with a 
disability who is otherwise qualified to perform the essential 
functions of his or her job. Further, in 1999 the Supreme Court 
held in Olmstead v. L.C. that ``unjustified isolation'' of 
individuals with disabilities is discrimination and a violation 
of Title II of the ADA (which prohibits discrimination on the 
basis of disability in all services, programs, and activities 
provided to the public by state and local governments).\156\ 
The decision became known as the ``integration mandate'' as the 
Court held that public entities must provide community-based 
services to individuals with disabilities when the services are 
appropriate, if the individual wants the services, and if the 
services can be reasonably accommodated. The decision 
underscored the importance of the four goals of the ADA: that 
individuals with disabilities have a right to independent 
living, equal opportunities, economic self-sufficiency, and 
full participation in society.
---------------------------------------------------------------------------
    \156\Olmstead v. L.C. by Zimring, 527 U.S. 581, 582 (1999).
---------------------------------------------------------------------------
    During an exchange at the February 7th hearing between Ms. 
Gupta and Congressman Andy Levin (D-MI-9), they discussed the 
intersection of the ADA and phasing out 14(c):

          Mr. Levin: [. . .] The FLSA has a provision, section 
        14(c), as you know, that allows individuals with 
        disabilities to be paid a subminimum wage. As your 
        testimony states, some are paid as little as pennies an 
        hour. Why is it important to phase out 14(c) to ensure 
        all people in this country are paid a fair wage, as 
        these groups are requesting?
          Ms. Gupta: Thank you, Congressman. Section 14(c) of 
        the FLSA was actually written at a time when 
        individuals with disabilities were predominantly housed 
        in institutions and endured long-term segregation. At 
        that time, there were no statutory requirements that 
        would support individuals with disabilities in the 
        workplace, and individuals with disabilities didn't 
        actually have legal protections from discrimination. 
        And when Congress passed the ADA in 1990, it ushered in 
        a new era, and then the Supreme Court issued their 
        Olmstead versus L.C. opinion. And the reality is that 
        people with disabilities deserve to work alongside 
        friends, peers, and neighbors without disabilities. 
        They deserve to earn fair wages, to access equal 
        opportunity for advancement. And the 14(c) of the FLSA 
        has really locked classes of people with disabilities, 
        particularly with intellectual and developmental 
        disabilities, into really degrading subminimum wage and 
        sheltered workshops.
          Mr. Levin: And I assume it almost assures their 
        continued dependence on family or Federal dollars of 
        other kinds to be able to live and have food and 
        shelter and so forth.
          Ms. Gupta: That is right. It has created an increased 
        long-term dependency and, of course, this also can 
        create deeply kind of humiliating and personal 
        experiences that make people with disabilities feel 
        like kind of subhuman.\157\
---------------------------------------------------------------------------
    \157\House Comm. on Educ. and Labor, Gradually Raising the Minimum 
Wage to $15: Good for Workers, Good for Business, Good for the Economy, 
YouTube (Feb. 7, 2019), https://www.youtube.com/watch?v=JDGkim7aaHI 
(question and answer between Mr. Levin and Mr. Gupta at 6:15:10).

    Despite congressional inaction, six states and the city of 
Seattle, Washington, have taken steps to phase out 14(c) 
certificates. Vermont was the first state to phase out 14(c) 
certificates; beginning in 1996 and ending in 2002, the state 
defunded entities holding 14(c) certificates. Oregon and Rhode 
Island are in the process of phasing out 14(c) certificates 
after settling a lawsuit with the Obama Administration's 
Department of Justice on cases alleging violations under the 
ADA. In 2018, Seattle became the first city to phase out the 
use of 14(c) certificates. This is notable as Seattle was among 
the first cities to pass a law raising its minimum wage to $15 
an hour.
    Opponents of phasing out of 14(c) certificates contend that 
eliminating 14(c) certificates will leave individuals with 
disabilities without employment. However, thoughtful and well-
planned supports for individuals and for employers holding 
14(c) certificates can help transition workplaces and avoid job 
loss for these individuals. States that have phased out 14(c) 
have found that individuals with disabilities continue to work 
and contribute to their local economies. Vermont reports that 
62 percent of individuals with disabilities in the state find 
work in the community within one year of receiving state 
employment supports.\158\ Since 2005, Vermont has seen 
individuals with disabilities pay $11.9 million in payroll 
taxes, and the state has reduced Social Security and other 
social services by over $5.5 million.\159\
---------------------------------------------------------------------------
    \158\Halle Stockston, Vermont Closed Workshops for People with 
Disabilities; What Happened Next, Public Source (Sept. 24, 2014), 
https://www.publicsource.org/vermont-closed-workshops-for-people-with-
disabilities-what-happened-next/#.VLQ0V9LF8fY.
    \159\Chris Serres, Inclusion Pays Off, Star Tribune (Nov. 11, 
2015), http://www.startribune.com/vermont-took-bold-step-to-end-
segregation-of-disabled-adults/330697181/#/.
---------------------------------------------------------------------------
    Another common criticism of phasing out of 14(c) 
certificates is that individuals with disabilities cannot be as 
productive as workers without disabilities and therefore cannot 
be paid a regular wage. Individuals with disabilities have 
their wages calculated under 14(c) certificates based on time 
trials that have no oversight and are not compliant with the 
ADA. Thus, the very nature of the calculation is 
discriminatory. While some employer advocates of 14(c) 
certificates suggest subminimum wage employment leads to 
higher-paying jobs, GAO found that in 2000 only ``[a]bout 13 
percent of all 14(c) workers in work centers left the center; 
about 5 percent of the workers left to take a job in the 
community earning either special minimum wages or at least the 
minimum wage.''\160\ Ms. Gupta stated during her testimony at 
the February 7th hearing:

    \160\Gov't Accountability Office, Special Minimum Wage Program: 
Centers Offer Employment and Support Services to Workers with 
Disabilities, but Labor Should Improve Oversight 4 (2001), https://
www.gao.gov/new.items/d01886.pdf.
---------------------------------------------------------------------------
          [U]nfortunately, 20 years after Olmstead and almost 
        30 years after the passage of the ADA, too many people 
        with disabilities spend their time in segregated 
        workshops or day programs with some paid just pennies 
        per hour. While in theory segregated settings provide 
        job training and experience to people with disabilities 
        and help them find regular employment in their 
        community, the reality is that too many remain stuck in 
        segregated settings for years.\161\
---------------------------------------------------------------------------
    \161\House Comm. on Educ. and Labor, Gradually Raising the Minimum 
Wage to $15: Good for Workers, Good for Business, Good for the Economy, 
YouTube (Feb. 7, 2019), https://www.youtube.com/watch?v=JDGkim7aaHI 
(statement by Ms. Gupta at 5:18:59).

    Phasing out 14(c) will allow workers with disabilities to 
earn the same wage as other workers and will prevent 
discrimination on the basis of disability.
    Eliminating 14(c) will have additional positive impacts on 
individuals with disabilities. When transitioning to 
competitive employment, research has shown that individuals 
with disabilities spend more time engaged in and contributing 
to their communities and developing meaningful natural 
supports.\162\ Individuals with disabilities will also have 
more money from their paychecks to spend in their communities 
and contribute to the local economy.
---------------------------------------------------------------------------
    \162\Nat'l Core Indicators, What work means: What does NCI tell us 
about the quality of life of adults with intellectual and developmental 
disabilities who are employed in the community? 5 NCI Data Brief 7 
(2011), http://www.nationalcoreindicators.org/upload/core-indicators/
NCI_Data_Brief-_Employment-_Issue_5_Dec_2011_FINAL_1.pdf
---------------------------------------------------------------------------
    During the February 7th hearing, Ms. Gupta and Congressman 
Joseph Morelle (D-NY-25) discussed the positive impacts of 
phasing out 14(c) for individuals with disabilities who move 
into competitive, integrated employment:

          Mr. Morelle: [. . .] Let me just in closing, six 
        States, as you mentioned, have completed or are in the 
        process of phasing out 14(c). I think Vermont and New 
        Hampshire have completely phased out. Maryland, Alaska, 
        Oregon and Rhode Island are in the process of it, and I 
        understand Hawaii and Kentucky are at least considering 
        it.
          Can you just talk about the other benefits 
        individuals with disabilities experience other than 
        financial benefits from the phasing out of 14(c) and 
        moving into a competitive integrated employment 
        setting?
          Ms. Gupta: Yes. I mean, so much of what we are 
        talking about today is really about the dignity of work 
        and people with disabilities feeling the dignity of 
        being human beings entitled to the same protections as 
        any other people in this country and being able to 
        participate in the mainstream economy with people 
        without disabilities, to have the opportunity, to have 
        equal opportunity for jobs and housing and the like. 
        And that this move from the ADA to Olmstead and beyond 
        is really about ensuring that people with disabilities 
        have equal opportunity and are not kind of considered, 
        you know, folks to be segregated out of the mainstream 
        economy.\163\
---------------------------------------------------------------------------
    \163\House Comm. on Educ. and Labor, Gradually Raising the Minimum 
Wage to $15: Good for Workers, Good for Business, Good for the Economy, 
YouTube (Feb. 7, 2019), https://www.youtube.com/watch?v=JDGkim7aaHI 
(question and answer between Mr. Morelle and Ms. Gupta at 6:28:06).
---------------------------------------------------------------------------

The subminimum wage for workers under 20 years of age

    Under the FLSA, an employer may pay employees under 20 
years of age a subminimum wage of $4.25 an hour for the first 
90 calendar days of employment. This provision was added to the 
FLSA in 1996\164\ based on the false assumptions that an 
increase in the federal minimum wage leads to increased 
unemployment among teenagers.\165\ However, research shows that 
minimum wage increases do not reduce employment among 
teenagers.\166\ In fact, research suggests a higher minimum 
wage may be especially beneficial for teenaged workers of color 
who often have higher barriers to employment and may be unable 
to afford the supports and services they need, such as 
transportation, to seek and maintain employment.\167\
---------------------------------------------------------------------------
    \164\Fair Labor Standards Amendments of 1966, P.L. 89-601, 80 Stat. 
830.
    \165\42 Cong. Rec. H9850 (daily ed. Aug. 2, 1996) (statement of 
Representative Goodling). The 1996 Amendments to the Fair Labor 
Standards Act (H.R. 3448) contained the permanent provision for a youth 
minimum wage. This language was based on House Amendment 1085 offered 
by Rep. Goodling for H.R. 1227 (104th Congress), approved May 23, 1996. 
During debate of H.R. 3448, Representative Goodling stated ``Many 
studies support the conclusion that a mandated increase in the minimum 
wage would jeopardize . . . young Americans looking for their first 
job. . .'' Id.
    \166\Sylvia A. Allegretto et al., Do Minimum Wages Really Reduce 
Teen Employment? 50 (2) Industrial Relations 205, 221 (2011), http://
irle.berkeley.edu/files/2011/Do-Minimum-Wages-Really-Reduce-Teen-
Employment.pdf; Arindrajit Dube et al., supra note 116 at 699.
    \167\Allegretto et al., supra note 166, at 228.
---------------------------------------------------------------------------
    The subminimum was also established with the purpose of 
creating job opportunities for young workers.\168\ However, 
there is no employer reporting of the use of the youth minimum 
wage, and it is believed to be rarely used. As Dr. Reich 
testified at the February 7th hearing, ``[t]hese considerations 
suggest that the federal youth subminimum wage is not 
accomplishing its intended purpose.''\169\
---------------------------------------------------------------------------
    \168\``The opportunity wage allows employers to pay new hires under 
the age of 20 not less than $4.25 per hour for the first 90 calendar 
days of employment. This will encourage employers to hire new workers . 
. . .'' Conference Report On H.R. 3448, supra note 163.
    \169\Reich Testimony at 17.
---------------------------------------------------------------------------
    Many teenage workers are from low-income families, and 
their earnings are an important contribution to their 
households' incomes. Mr. Brodeur testified at the February 7th 
hearing about the decision to reject a subminimum wage for teen 
workers when increasing the state's minimum wage:

          Initially, I was intrigued by the concept, and from 
        my efforts on workforce development issues as well as 
        my own experience, I understood the lifelong benefits 
        of learning the value and dignity of work at a young 
        age. However, as I continued to meet with my 
        constituents and review expert testimony submitted to 
        my committee, I again determined that this policy would 
        adversely impact the very population it was designed to 
        help. Among families in Massachusetts whose earnings 
        are at the bottom 20th percentile, teen workers bring 
        home nearly 18% of the family income. These teens are 
        not merely working a summer job for extra spending 
        money, but are instead functioning as breadwinners for 
        their families. To tell these hardworking young people 
        that their work product or services, which might be 
        rendered alongside and identical to those of an older 
        worker, are somehow less valuable because of their age 
        was unacceptable to me.\170\
---------------------------------------------------------------------------
    \170\Broduer Testimony at 4 (internal citation omitted).

    Eliminating the subminimum wage for teenaged workers and 
raising the minimum wage generally may also help improve 
educational outcomes. For young workers, increased earnings may 
reduce the likelihood of working substantial hours while in 
school, helping them better balance work and school. Mr. Wise 
underscored this point during his testimony at the February 7th 
---------------------------------------------------------------------------
hearing:

          I was a great student and by the eighth grade was in 
        advanced placement classes. My teachers said, 
        ``Terrence you're going to do great things. You can be 
        anything.'' I wanted to be a Gamecock at the University 
        of South Carolina. I was going to be a writer. But I 
        went to work at age 16 to try to help my family 
        survive. One day I came home from school, there were no 
        lights or food in the fridge and I couldn't do homework 
        without food and lights.
          So I went and got my first job at Taco Bell. I only 
        made $4.25 an hour, which I believe was the minimum 
        wage at the time but I knew my family needed the 
        money--desperately. My first paycheck was $150. It went 
        to the light bill. One job wasn't enough. So I got a 
        second job at Wendy's to bring in more money for my 
        family. I tried to balance both work and school. I had 
        As in AP History, English, Science, and Math. I started 
        falling asleep in class. My teachers asked, ``Terrence, 
        what's wrong?'' I told them I was working two jobs. I 
        didn't need my AP Calculus to run the numbers at home. 
        There simply wasn't enough money for basic necessities. 
        I had left school and my dream of college behind. At 
        17, I became a full-time worker and was left with no 
        other choice but to dropout of school.\171\
---------------------------------------------------------------------------
    \171\Wise Testimony at 1.

    Nearly half of U.S. students pursuing a two-year degree, 
and over 40 percent of students pursuing a four-year degree, 
work more than 35 hours per week.\172\ Studies show that 
working more than 20 hours per week puts college students at 
risk of dropping out.\173\
---------------------------------------------------------------------------
    \172\U.S. Dep't of Educ., Profile of Undergraduate Students: 2011-
12 5 (2014), https://nces.ed.gov/pubs2015/2015167.pdf.
    \173\Elisabeth Hovdhaugen, Working While Studying: the Impact of 
Term-time Employment on Dropout Rates, 28 Journal of Educ. and Work 
631, 631-51 (2015).
---------------------------------------------------------------------------
    Ms. Gupta also testified at the February 7th hearing that 
Congress should be concerned about the ``potential negative 
consequences of the youth minimum wage on food insecurity faced 
by too many college students today.''\174\ A 2018 Wisconsin 
HOPE Lab survey of 43,000 students at 66 institutions in 20 
states and the District of Columbia found that 36 percent of 
students at 4-year institutions were food insecure, including 
47 percent of Black students, 42 percent of Hispanic students, 
and 46 percent of Pell Grant recipients.\175\
---------------------------------------------------------------------------
    \174\Vanita Testimony at 8.
    \175\Vanessa Romo, Hunger and Homelessness are Widespread Among 
College Students, Study Finds, Nat'l Pub. Radio (April 3, 2018, 8:48 
PM), https://www.npr.org/sections/thetwo-way/2018/04/03/599197919/
hunger-and-homelessness-are-widespread-among-college-students-study-
finds.
---------------------------------------------------------------------------

   FEDERAL ACTION IS NEEDED TO ENSURE THE MINIMUM WAGE IS A STRONG, 
                       UNIFORM FEDERAL WAGE FLOOR

    The FLSA sets a federal floor for the minimum wage, and 
states and localities are free to build upon that floor and 
establish higher minimum wages. In states with weak labor 
standards or low union density, a federal minimum wage may be 
the only effective labor market institution that elevates wages 
for low-paid workers. The fact that wages are lower in states 
with weaker labor standards suggests that a wage floor has a 
greater impact for workers in those states. Restoring the value 
of the federal minimum wage to ensure the minimum wage is a 
strong, uniform federal wage floor is key for these workers.
    Raising the federal minimum wage to $15 by 2024, as H.R. 
582 would do, creates a strong national wage that will protect 
covered workers no matter where they live. By 2024, $15 an hour 
(the equivalent of approximately $13 in 2019 dollars) is the 
minimum amount a single adult working full time will need to 
earn to cover basic living expenses.\176\ Even in the area with 
the lowest cost of living in the country Beckley, West 
Virginia\177\ in 2024, a two-parent, two-child household in 
which both parents earn $15 an hour and pay taxes will only 
have $1 left each month after covering basic living expenses, 
according to calculations based on MIT's Living Wage 
Calculator.\178\ As Dr. Zipperer testified at the February 7th 
hearing:
---------------------------------------------------------------------------
    \176\Nat'l Emp't Law Project, Workers in all 50 States will Need 
$15 an Hour by 2024 to Afford the Basics 1 (2017), https://
s27147.pcdn.co/wp-content/uploads/workers-in-all-50-states-will-need-
15-by-2024.pdf.
    \177\As determined by the Census Bureau.
    \178\Living Wage Calculator, Massachusetts Institute of Technology, 
http://livingwage.mit.edu.

          By 2024, in areas all across the United States, even 
        a single adult with no children will need to be earning 
        more than $15 per hour on a full-time, full-year basis 
        in order to achieve a modest but adequate standard of 
        living . . . [e]arning at least $15 per hour will be a 
        necessity for parents who wish to raise families. Two 
        adults working 40 hours a week at $15 per hour will 
        earn $62,400 per year. If these two adults have two 
        children to care for, by 2024 there will be no area in 
        the country where they can live and meet the basic 
        requirements of their family budget with wage income 
        alone.\179\
---------------------------------------------------------------------------
    \179\Zipperer Testimony 6.

    Failing to ensure workers across the country have a strong, 
uniform wage floor risks workers falling farther behind. This 
is especially true where states enact preemption laws to block 
local efforts to increase the minimum wage at the municipal or 
county level. Currently, 17 of the 21 states at the $7.25 an 
hour federal minimum have enacted preemption laws. During her 
testimony at the February 7th hearing, Ms. Eckhouse lamented 
how her home state of Iowa enacted a law preventing cities and 
counties from setting a higher minimum wage, even as the state 
is unlikely to raise its minimum wage above the current federal 
rate of $7.25 an hour. Ms. Eckhouse stated that ``[w]e need a 
federal increase to ensure that wherever people live and work 
in Iowa or around the country, they can meet their basic 
needs.''\180\ Mr. Wise also testified about his state's efforts 
to block local increases to the minimum wage at the February 
7th hearing:
---------------------------------------------------------------------------
    \180\Eckhouse Testimony at 2.

          75% of voters in Kansas City voted for a $15 minimum 
        wage in 2017. Workers won that victory by taking big, 
        bold, and dramatic actions like going on strike, 
        marching, and sleeping on the steps of City Hall for a 
        week in our ``Fast for $15.'' It was a huge victory for 
        us until the state legislature pre-empted the minimum 
        wage, returning it to $7.65. Missouri voters increased 
        the minimum wage in 2018 but we're still not achieving 
        $15 per hour--the minimum we need to support our 
        families. That's why we need Congress to take action 
        immediately to raise the federal minimum wage.\181\
---------------------------------------------------------------------------
    \181\Wise Testimony at 3.

    Ms. Gupta, during her testimony at the February 7th 
hearing, highlighted a similar occurrence in Alabama, where 
state legislators in Alabama nullified the Birmingham City 
Council's vote to increase the minimum wage--an effort led by 
workers and faith leaders.\182\ Ms. Gupta quoted Derrick 
Johnson, CEO of the NAACP, who noted, ``[t]he state's 
legislature must be held accountable for discriminating against 
hard working Birmingham citizens fighting to get out of 
poverty.''\183\
---------------------------------------------------------------------------
    \182\Several worker advocacy groups and civil rights groups have 
challenged the state legislature's actions in court.
    \183\Gupta Testimony at 9.
---------------------------------------------------------------------------

A regionalized minimum wage would leave workers and communities behind

    The notion of a regionalized minimum wage is not new. 
During the debates leading up to the passage of the FLSA, 
Southern legislators who feared a national wage floor would 
create wage equity between white workers and workers of color 
proposed a regional approach that would have maintained racial 
wage disparities.\184\ Civil rights leaders at the time 
strongly opposed this approach, and Congress ultimately 
rejected a regional approach. In fact, every time Congress has 
considered a regional approach, it has rejected it.
---------------------------------------------------------------------------
    \184\See Sean Farhang & Ira Katznelson, The Southern Imposition: 
Congress and Labor in the New Deal and Fair Deal 19 (2005), https://
gspp.berkeley.edu/assets/uploads/research/pdf/article_4.pdf.
---------------------------------------------------------------------------
    A regionalized minimum wage would permanently lock in lower 
wages, especially in certain Southern states where depressed 
wages are a result of a history of racially discriminatory 
policies. As Ms. Gupta testified at the February 7th hearing, 
``[t]en of the 21 states stuck at $7.25 an hour are in the 
South, with large African American populations, and growing 
Latino and Asian American populations.''\185\ Analysis of a 
recent proposal to regionalize the minimum wage found that 15.6 
million fewer workers would receive a raise than under H.R. 
582, and over one-third of those left behind--5.6 million--
would be women of color.\186\ As Dr. Spriggs testified at the 
February 7th hearing:
---------------------------------------------------------------------------
    \185\Gupta Testimony at 9 (internal citation omitted).
    \186\Econ. Policy Inst. et al., The Federal Minimum Wage Should be 
a Robust National Wage Floor, Not Adjusted Region by Region 2 (2019), 
https://www.epi.org/files/uploads/minimum-wage-fact-sheet-2019.pdf.

          If you agree to those regional pay ideas, which 
        Congress debated extensively in 1937 and rejected, 
        extensively in 1966 and rejected, you won't be 
        accepting a new idea, you will be cementing an old idea 
        that got rejected twice and you will create a racial 
        pay disparity. It will be, once again, America 
        understands the problem, we are going to pass a labor 
        law that improves the lives of American workers, and 
        Black workers will be told, the bus is full when it 
        pulls out. If you do that, that is what you will be 
        doing.\187\
---------------------------------------------------------------------------
    \187\House Comm. on Educ. and Labor, Gradually Raising the Minimum 
Wage to $15: Good for Workers, Good for Business, Good for the Economy, 
YouTube (Feb. 7, 2019), https://www.youtube.com/watch?v=JDGkim7aaHI 
(statement by Dr. Spriggs at 3:09:40).

    A regionalized minimum wage would weaken the federal 
minimum wage as a counterweight to outsized employer bargaining 
power, especially in rural areas. Research suggests that low 
wages for employees in low-wage industries can often be 
attributed to the employer's bargaining power to set low wages, 
rather than an employee's work experience or education.\188\ A 
strong national floor serves as a counterweight to this 
bargaining power, while lower federal minimum wages based on 
region lock in this wage depression. A single national minimum 
wage as a counterweight is especially important for small-towns 
or rural areas where often only a few companies are the main 
source of employment and thus are able to keep wages low for 
entire regions.
---------------------------------------------------------------------------
    \188\John Abowd et al., Persistent Inter-industry Wage Differences: 
Rent Sharing and Opportunity Costs, IZA Journal of Labor Econs. 1, 22 
(2012).
---------------------------------------------------------------------------
    A regional minimum wage would rob low-wage states and areas 
of economic stimulus. As discussed above, when low-wage workers 
have increases in income, they spend that money locally, 
stimulating their local economies. Because the increases in 
income will be larger for workers in low-wage states and areas, 
these places will also benefit from a greater stimulus effect. 
Creating a lower minimum wage for these areas deprives these 
local economies of the full economic stimulus of minimum wage 
increases. Additionally, higher minimum wages can also help 
states keep workers who are in their prime earning years, 
leaving these states with a better-quality workforce that 
attracts businesses into the state.\189\
---------------------------------------------------------------------------
    \189\Reich Testimony at 14.
---------------------------------------------------------------------------
    In fact, by rejecting a regional approach in the 1930s and 
1960s and setting a strong national standard, Congress had a 
positive, dynamic effect on economies in the South. As Dr. 
Reich testified at the February 7th hearing:

          By establishing a single national floor at a time of 
        other major economic transformations, Congress set in 
        motion a series of substantial positive economic 
        changes in the South. In particular, the isolated 
        economies of the rural South became more linked to the 
        national economy. The South prospered in succeeding 
        decades, and the southern regional wage differential 
        became much smaller. A similar development occurred as 
        a result of the civil rights revolution and the 
        associated extension of Fair Labor Standard Act 
        coverage to more of the South's industries [sic].\190\
---------------------------------------------------------------------------
    \190\Reich Testimony at 16 (citation omitted).

    This positive impact of a strong, uniform federal minimum 
wage floor on the Southern economy could continue. For example, 
recent research evaluating the impact of a $15 an hour minimum 
wage in 2024 on Mississippi estimates a net gain in employment 
of approximately 2,000 jobs by 2024. This would be equal to 0.1 
percent of total employment in Mississippi.\191\
---------------------------------------------------------------------------
    \191\Michael Reich et al., The Employment Effects of a $15 Minimum 
Wage in the U.S. and in Mississippi: A Simulation Approach 42 (2019), 
http://irle.berkeley.edu/files/2019/02/The-Employment-Effects-of-a-15-
Minimum-Wage-in-the-US-and-in-Mississippi.pdf.
---------------------------------------------------------------------------
    The Committee is also concerned that a regional minimum 
wage would hamper DOL's enforcement of the federal minimum 
wage, making it harder to ensure workers get the pay they are 
owed. Already, DOL has limited resources for ensuring workers 
are paid federal minimum wage. It is unclear how a multiplicity 
of regional federal minimum wages will impact the time and 
resources needed to investigate and enforce minimum wage 
standards, especially for employers that operate in multiple 
metropolitan statistical areas within a given state or region.

                      Section-by-Section Analysis


Section 1. Short title

    This section states that the title of the bill is the Raise 
the Wage Act (the Act).

Section 2. Minimum wage increases

    Federal Minimum Wage. The Act increases the federal minimum 
wage ``6(a)(1) wage.'' for employees over a six-year period. In 
the first year (2019), the federal minimum wage will increase 
by $1.30 from $7.25 to $8.55 per hour. This increase will occur 
on the first day of the third month that begins after the date 
of enactment of the Act (the effective date). One year after 
the effective date, the minimum wage will increase by $1.30 to 
$9.85; two years after the effective date it will increase by 
$1.30 to $11.15; three years after the effective date, it will 
increase by $1.30 to $12.45; four years after the effective 
date, it will increase by $1.30 to $13.75; and five years after 
the effective date, the minimum wage will increase by $1.25 to 
$15.00. Six years after the effective date (2025), the minimum 
wage will be indexed to median wages.
    Annual Indexing of Minimum Wage Based on Median Wages. Six 
years after enactment, and each subsequent year, the minimum 
wage will increase based on the percentage increase, if any, in 
the median hourly wages of all employees. The Secretary of 
Labor, through the Bureau of Labor Statistics (BLS), will 
calculate this change by compiling data on the hourly wages of 
all employees. The minimum wage will not decrease based on BLS' 
calculation.

Section 3. Tipped employees

    The Act increases the tipped wage from $2.13 to $3.60 in 
2019. For each succeeding year, the Act increases the tipped 
wage by the lesser of either $1.50 or the difference between 
the tipped wage and the 6(a)(1) wage. Once the tipped wage 
reaches the 6(a)(1) wage in 2027, the Act eliminates the tipped 
wage by stipulating that the tipped wage will be the 6(a)(1) 
wage.
    This section also clarifies that any employee has the right 
to retain any tips received by such employee.

Section 4. Newly hired employees who are less than 20 years old

    The Act increases the minimum wage for youth under 20 years 
of age from $4.25 to $5.50 in 2019. Each subsequent year, the 
Act increases the youth wage by the lesser of either $1.25 or 
the difference between the youth wage and the 6(a)(1) wage. 
Once the youth wage reaches the 6(a)(1) wage in 2027, the Act 
eliminates the youth wage by stipulating that the youth wage 
will be the 6(a)(1) wage.

Section 5. Publication of notice of changes to the minimum wage

    The Act requires the Secretary of Labor to publish in the 
Federal Register and on DOL's website announcements of the 
increases in the 6(a)(1), tipped, 14(c), and youth wages sixty 
days prior to each effective date.

Section 6. Promoting economic self-sufficiency for individuals with 
        disabilities

    The Secretary of Labor will discontinue issuing 14(c) 
certificates on the date of enactment of the Act. Existing 
14(c) certificate holders will be permitted to continue using 
their subminimum wage certificates for six years after 
enactment. Certificate holders will increase the hourly wages 
paid to individuals with disabilities who are being paid 
subminimum wages pursuant to 14(c) on the following schedule: 
one year after the 6(a)(1) wage takes effect (the effective 
date), the subminimum wage paid shall be at least $4.25; two 
years after the effective date, the subminimum wage paid shall 
be at least $6.40; three years after the effective date, the 
subminimum wage paid shall be at least $8.55; four years after 
the effective date, the subminimum wage paid shall be at least 
$10.70; and five years after the effective date, the subminimum 
wage paid shall be at least $12.85. Six years after the 
effective date, the subminimum wage paid to 14(c) covered 
employees must be the same as the 6(a)(1) wage. During the six 
years of transition to the 6(a)(1) wage, the Secretary of Labor 
shall, upon request, assist certificate holders with compliance 
and continuing employment opportunities for individuals with 
disabilities.

Section 7. General effective date

    Unless otherwise provided for in the Act, the amendments 
made by the Act take effect on the first day of the third month 
that begins after the date of enactment. The effective date in 
the Commonwealth of the Northern Mariana Islands is 18 months 
after the Act's general effective date.

Section 8. GAO report

    The Act requires the Government Accountability Office (GAO) 
to review the economic conditions in the Commonwealth of the 
Northern Mariana Islands, estimate the proportion of employees 
directly affected by wage increases under the Act 
(disaggregated by industry and occupation), and submit a report 
to Congress within one year after H.R. 582's enactment.

                       Explanation of Amendments

    The Amendment in the Nature of a Substitute is explained in 
the descriptive portions of this report.

              Application of Law to the Legislative Branch

    Pursuant to section 102(b)(3) of the Congressional 
Accountability Act, Pub. L. No. 104-1, H.R. 582, as amended, 
applies to terms and conditions of employment within the 
legislative branch by amending the FLSA.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act (as amended by Section 101(a)(2) of the 
Unfunded Mandates Reform Act, Pub. L. No. 104-4), the Committee 
adopts as its own the estimate of and statement regarding 
federal mandates in H.R. 582, as amended, prepared by the 
Director of the Congressional Budget Office.

                           Earmark Statement

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 582 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as described in clauses 9(e), 9(f), and 9(g) of rule 
XXI.

                            Roll Call Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following roll call votes occurred during the Committee's 
consideration of H.R. 582:



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

             Statement of Performance Goals and Objectives

    Pursuant to clause (3)(c) of rule XIII of the Rules of the 
House of Representatives, H.R. 582 would update current law to 
increase the federal minimum wage, phase out subminimum wages 
for teenaged and tipped workers, and eliminate subminimum wage 
certificates for individuals with disabilities in an effort to 
increase workers' wages, decrease poverty, and stimulate local 
economies.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of H.R. 582 establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                                Hearings

    Pursuant to section 103(i) of H. Res. 6 for the 116th 
Congress, the Committee held a legislative hearing entitled 
``Gradually Raising the Minimum Wage to $15: Good for Workers, 
Good for Businesses, and Good for the Economy,'' which was used 
to consider H.R. 582. The Committee heard testimony on the 
declining value of the federal minimum wage and its impact on 
workers, how increasing the minimum wage will raise wages for 
workers with little to no negative employment impacts, and the 
benefits to businesses and local economies from minimum wage 
increases. The Committee heard testimony from Dr. William 
Spriggs, Chief Economist at the AFL-CIO; Mr. Terrence Wise, a 
shift manager at McDonald's; Dr. Douglas Holtz-Eakin, President 
of the American Action Forum; Dr. Ben Zipperer, Economist at 
the Economic Policy Institute; Ms. Vanita Gupta, President and 
CEO of the Leadership Conference on Civil and Human Rights; Ms. 
Simone Barron, a server in a full service restaurant; Ms. Kathy 
Eckhouse, owner of La Quercia; Dr. Michael Strain, Resident 
Scholar and Director of Economic Policy Studies at the American 
Enterprise Institute; Dr. Michael Reich, Professor at 
University of California Berkeley; and Mr. Paul Brodeur, 
Massachusetts State Representative.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

               New Budget Authority and CBO Cost Estimate

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974, and pursuant to clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following estimate for 
H.R. 582 from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 22, 2019.
Hon. Bobby Scott,
Chairman, Committee on Education and Labor,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 582, the Raise the 
Wage Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Meredith 
Decker.
            Sincerely,
                                            Mark P. Hadley,
                                        (For Keith Hall, Director).
    Enclosure.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    The bill would
           Increase the federal minimum wage in six 
        annual steps, from $7.25 per hour to $15 per hour, and 
        then adjust the wage annually thereafter to keep pace 
        with the median hourly wage
           Increase spending subject to appropriation 
        by increasing the wages of some federal workers
           Increase off-budget direct spending by 
        increasing the wages of some postal workers
           Impose intergovernmental and private-sector 
        mandates by requiring employers to pay a higher minimum 
        wage to employees who are covered under the Fair Labor 
        Standards Act
    Estimated budgetary effects would primarily stem from
           Increasing the wages of some federal 
        employees
    Areas of significant uncertainty include
           Projections of increases in the median 
        hourly wage and wage growth for federal workers over 
        the next decade
    Bill summary: H.R. 582 would amend the Fair Labor Standards 
Act (FLSA) to increase the federal minimum wage in six annual 
steps from $7.25 per hour to $15 per hour in 2025 (shortly 
after enactment, the minimum wage would be $8.55 per hour). 
After 2025, the minimum wage would be adjusted annually to 
account for changes in the median hourly wage of all workers. 
By 2029, the minimum wage would be $16.82, CBO estimates. In 
addition, the bill would repeal the separate federal minimum 
cash wage for workers who receive tips by gradually raising 
that wage until it equals the federal minimum wage for 
nontipped workers. Finally, H.R. 582 would repeal the separate 
minimum wage for teenage workers and workers with disabilities 
by raising their wages gradually to equal the federal minimum 
wage.
    Estimated Federal cost: The estimated budgetary effect of 
H.R. 582 is shown in Table 1. The costs of the legislation fall 
within all budget functions except 950 (undistributed 
offsetting receipts).

                                                    TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 582
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      By fiscal year, millions of dollars--
                                                       -------------------------------------------------------------------------------------------------
                                                         2019   2020   2021   2022   2023   2024   2025   2026   2027   2028   2029  2019-2024  019-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Increases in Off-Budget Direct Spending
 
Estimated Budget Authority............................      0      0      0      0      *      *      *      *      *      *      *        *          1
Estimated Outlays.....................................      0      0      0      0      *      *      *      *      *      *      *        *          1
 
                                                     Increases in Spending Subject to Appropriation
 
Estimated Authorization...............................      0      *      *      1      2      6     11     14     14     14     14        9         76
Estimated Outlays.....................................      0      *      *      1      2      6     11     14     14     14     14        9         76
--------------------------------------------------------------------------------------------------------------------------------------------------------
* = between zero and $500,000.

    Basis of estimate: For this estimate, CBO assumes that the 
legislation will be enacted by October 1, 2019, and that 
starting in 2020, the minimum wage would rise incrementally, 
reaching $15 in 2025. In subsequent years, the minimum wage 
would increase to keep pace with the increase in median hourly 
earnings.
    Increasing the minimum wage would directly affect the 
federal budget by raising the pay of a small group of federal 
employees who are paid an hourly wage. This estimate accounts 
only for those direct effects on the budget.
    H.R. 582 also would indirectly affect the budget by 
boosting the prices of some goods and services that the 
government purchases. Tax receipts and federal spending for 
health and income security programs also would be indirectly 
affected as income increases for some people and falls for 
others. Without further analysis, CBO cannot estimate whether 
the net result of those indirect effects over the coming decade 
would be to increase or decrease budget deficits.
    Direct spending (off-budget): Currently, all Postal Service 
employees earn more than $8.55 per hour. Using information from 
the Postal Service, CBO estimates that under H.R. 582, about 
100 employees would receive pay increases to minimum hourly 
rates starting in 2023. CBO estimates that raising wages for 
the affected workers in step with the provisions of H.R. 582 
would increase direct spending by less than $150,000 per year 
over the 2023-2029 period, with a cumulative cost of about 
$700,000 over the 2020-2029 period. Changes in the cost of 
operating the Postal Service are reflected in the unified 
budget as changes in direct spending. The Postal Service 
operations are designated as off-budget.
    Spending Subject to Appropriation: Implementing H.R. 582 
would increase spending subject to appropriation by $76 million 
over the next 10 years, CBO estimates. Using information from 
the Office of Personnel Management, CBO estimates that fewer 
than 100 workers initially would see a pay increase. As the 
minimum wage increased over time, however, more workers' pay 
would rise, and by the end of 2029, nearly 7,000 workers' wages 
would increase. For most affected employees, the pay raise 
would be less than 50 cents per hour, but for others the raise 
could be as much as $10 per hour.
    Uncertainty: The uncertainty in this estimate depends in 
part on CBO's projections of various measures of wage growth. 
CBO uses the employment cost index to project wage growth for 
federal employees because current law explicitly links federal 
employee pay to that index. After reaching $15 per hour in 
2025, however, increases in the minimum wage would depend on 
growth in median wages. Thus, if growth in one of those two 
measures diverged significantly from the other, outlays could 
be greater or smaller than CBO estimated.
    Over the past 10 years, policymakers have in some cases 
constrained increases in federal pay that would have otherwise 
occurred because of changes in the employment cost index. If 
that trend continued, increases in the minimum wage would 
probably outpace federal wage increases, and a larger group of 
federal employees would see faster increases in their wages.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. Only on-budget changes to outlays or revenues are 
subject to pay-as-you-go procedures. Spending for the Postal 
Service is classified as off-budget, therefore H.R, 582 is not 
subject to pay-as-you-go procedures.
    Increase in long-term deficits: CBO estimates that enacting 
H.R. 582 would not increase on-budget deficits in any of the 
four consecutive 10-year periods beginning in 2030.
    Mandates: H.R. 582 would impose intergovernmental and 
private-sector mandates as defined in the Unfunded Mandates 
Reform Act (UMRA) by requiring employers whose workers are 
covered under the FLSA to pay a higher minimum wage.
    CBO estimates that the aggregate additional amount paid to 
those workers to meet the new minimum wage requirements would 
significantly exceed the thresholds established in UMRA for 
private-sector and intergovernmental entities in each year 
beginning in 2020 and 2021, respectively. In 2019, the 
intergovernmental threshold under UMRA is $82 million and the 
private-sector threshold is $164 million; both are adjusted 
annually for inflation.
    CBO estimates that by 2025--when the minimum wage under 
H.R. 582 reaches $15 per hour--state, local, and tribal 
employers would be required to pay covered workers $3 billion 
in additional wages annually; the additional annual cost to 
private-sector employers would be $48 billion. Those amounts do 
not account for employers' possible responses to the higher 
wage requirements, which could include reducing hiring, among 
other responses. If employers respond by taking such actions, 
CBO expects the costs to be lower, but still significantly 
higher than the thresholds established in UMRA.
    CBO estimated the cost of the mandates using monthly data 
from the Census Bureau's Current Population Survey to estimate 
the distribution of workers' hourly wages under current law. In 
projecting future hourly wages, CBO accounted for prospective 
increases in some states' minimum wage rates, including those 
coming into effect under current and future state law.
    CBO then identified the subset of workers covered under the 
FLSA whose hourly wages, in CBO's projections, would fall below 
the schedule of minimum wages set by H.R. 582. For this 
analysis, CBO excluded workers who are not covered by the 
FLSA--including those in most small businesses and in 
occupations that generally are exempt from the FLSA under 
current law--and workers whose wages would be more than $15 per 
hour in 2025. For both of those types of workers, CBO expects 
that employers would incur additional costs to increase wages, 
but such costs would not directly result from the employers' 
compliance with the mandate.
    Estimate prepared by: Federal costs: Meredith Decker, Mark 
Grabowicz, Daniel Ready; Mandates: Nabeel Alsalam, Andrew 
Laughlin.
    Estimate reviewed by: Christi Hawley Anthony, Chief, 
Projections; Sheila Dacey, Chief, Income Security and 
Education; Susan Willie, Chief, Mandates; Kim Cawley, Chief, 
Natural and Physical Resources; H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis; Theresa Gullo, 
Assistant Director for Budget Analysis.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 582. However, 
clause 3(d)(2)(B) of that rule provides that this requirement 
does not apply when the committee has included in its report a 
timely submitted cost estimate of the bill prepared by the 
Director of the Congressional Budget Office under section 402 
of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, H.R. 582, as reported, are shown as follows:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                    FAIR LABOR STANDARDS ACT OF 1938



           *       *       *       *       *       *       *
                              definitions

  Sec. 3. As used in this Act--
  (a) ``Person'' means an individual, partnership, association, 
corporation, business trust, legal representative, or any 
organized group of persons.
  (b) ``Commerce'' means trade, commerce, transportation, 
transmission, or communication among the several States or 
between any State and any place outside thereof.
  (c) ``State'' means any State of the United States or the 
District of Columbia or any Territory or possession of the 
United States.
  (d) ``Employer'' includes any person acting directly or 
indirectly in the interest of an employer in relation to an 
employee and includes a public agency, but does not include any 
labor organization (other than when acting as an employer) or 
anyone acting in the capacity of officer or agent of such labor 
organization.
  (e)(1) Except as provided in paragraphs (2), (3), and (4), 
the term ``employee'' means any individual employed by an 
employer.
  (2) In the case of an individual employed by a public agency, 
such term means--
          (A) any individual employed by the Government of the 
        United States--
                  (i) as a civilian in the military departments 
                (as defined in section 102 of title 5, United 
                States Code),
                  (ii) in any executive agency (as defined in 
                section 105 of such title),
                  (iii) in any unit of the judicial branch of 
                the Government which has positions in the 
                competitive service,
                  (iv) in a nonappropriated fund 
                instrumentality under the jurisdiction of the 
                Armed Forces,
                  (v) in the Library of Congress, or
                  (vi) the Government Printing Office;
          (B) any individual employed by the United States 
        Postal Service or the Postal Rate Commission; and
          (C) any individual employed by a State, political 
        subdivision of a State, or an interstate governmental 
        agency, other than such an individual--
                  (i) who is not subject to the civil service 
                laws of the State, political subdivision, or 
                agency which employs him; and
                  (ii) who--
                          (I) holds a public elective office of 
                        that State, political subdivision, or 
                        agency,
                          (II) is selected by the holder of 
                        such an office to be a member of his 
                        personal staff,
                          (III) is appointed by such an 
                        officeholder to serve on a policymaking 
                        level,
                          (IV) is an immediate adviser to such 
                        an officeholder with respect to the 
                        constitutional or legal powers of his 
                        office, or
                          (V) is an employee in the legislative 
                        branch or legislative body of that 
                        State, political subdivision, or agency 
                        and is not employed by the legislative 
                        library of such State, political 
                        subdivision, or agency.
  (3) For purposes of subsection (u), such term does not 
include any individual employed by an employer engaged in 
agriculture if such individual is the parent, spouse, child, or 
other member of the employer's immediate family.
  (4)(A) The term ``employee'' does not include any individual 
who volunteers to perform services for a public agency which is 
a State, a political subdivision of a State, or an interstate 
governmental agency, if--
          (i) the individual receives no compensation or is 
        paid expenses, reasonable benefits, or a nominal fee to 
        perform the services for which the individual 
        volunteered; and
          (ii) such services are not the same type of services 
        which the individual is employed to perform for such 
        public agency.
  (B) An employee of a public agency which is a State, 
political subdivision of a State, or an interstate governmental 
agency may volunteer to perform services for any other State, 
political subdivision, or interstate governmental agency, 
including a State, political subdivision or agency with which 
the employing State, political subdivision, or agency has a 
mutual aid agreement.
  (5) The term ``employee'' does not include individuals who 
volunteer their services solely for humanitarian purposes to 
private non-profit food banks and who receive from the food 
banks groceries.
  (f) ``Agriculture'' includes farming in all its branches and 
among other things includes the cultivation and tillage of the 
soil, dairying, the production, cultivation, growing, and 
harvesting of any agricultural or horticultural commodities 
(including commodities defined as agricultural commodities in 
section 15(g) of the Agricultural Marketing Act, as amended), 
the raising of livestock, bees, fur-bearing animals, or 
poultry, and any practices (including any forestry or lumbering 
operations) performed by a farmer or on a farm as an incident 
to or in conjunction with such farming operations, including 
preparation for market, delivery to storage or to market or to 
carriers for transportation to market.
  (g) ``Employ'' includes to suffer or permit to work.
  (h) ``Industry'' means a trade, business, industry, or other 
activity, or branch or group thereof, in which individuals are 
gainfully employed.
  (i) ``Goods'' means goods (including ships and marine 
equipment), wares, products, commodities, merchandise, or 
articles or subjects of commerce of any character, or any part 
or ingredient thereof, but does not include goods after their 
delivery into the actual physical possession of the ultimate 
consumer thereof other than a producer, manufacturer, or 
processor thereof.
  (j) ``Producer'' means produced, manufactured, mined, 
handled, or in any manner worked on in any State; and for the 
purposes of this Act an employee shall be deemed to have been 
engaged in the production of goods if such employee was 
employed in producing, manufacturing, mining, handling, 
transporting, or in any other manner working on such goods, or 
in any closely related process or occupation directly essential 
to the production thereof, in any State.
  (k) ``Sale'' or ``sell'' includes any sale, exchange, 
contract to sell, consignment for sale, shipment for sale, or 
other disposition.
  (l) ``Oppressive child labor'' means a condition of 
employment under which (1) any employee under the age of 
sixteen years is employed by an employer (other than a parent 
or a person standing in place of a parent employing his own 
child or a child in his custody under the age of sixteen years 
in an occupation other than manufacturing or mining or an 
occupation found by the Secretary of Labor to be particularly 
hazardous for the employment of children between the ages of 
sixteen and eighteen years or detrimental to their health or 
well-being) in any occupation, or (2) any employee between the 
ages of sixteen and eighteen years is employed by an employer 
in any occupation which the Secretary of Labor shall find and 
by order declare to be particularly hazardous for the 
employment of children between such ages or detrimental to 
their health or well-being; but oppressive child labor shall 
not be deemed to exist by virture of the employment in any 
occupation of any person with respect to whom the employer 
shall have on file an unexpired certificate issued and held 
pursuant to regulations of the Secretary of Labor certifying 
that such person is above the oppressive child labor age. The 
Secretary of Labor shall provide by regulation or by order that 
the employment of employees between the ages of fourteen and 
sixteen years in occupations other than manufacturing and 
mining shall not be deemed to constitute oppressive child labor 
if and to the extent that the Secretary of Labor determines 
that such employment is confined to periods which will not 
interfere with their schooling and to conditions which will not 
interfere with their health and well-being.
  (m)(1) ``Wage'' paid to any employee includes the reasonable 
cost, as determined by the Secretary of Labor, to the employer 
of furnishing such employee with board, lodging, or other 
facilities, if such board, lodging, or other facilities are 
customarily furnished by such employer to his employees: 
Provided, That the cost of board, lodging, or other facilities 
shall not be included as a part of the wage paid to any 
employee to the extent it is excluded therefrom under the terms 
of a bona fide collective-bargaining agreement applicable to 
the particular employee: Provided further,  That the Secretary 
is authorized to determine the fair value of such board, 
lodging, or other facilities for defined classes of employees 
and in defined areas, based on average cost to the employer or 
to groups of employers similarly situated, or average value to 
groups of employees, or other appropriate measures of fair 
value. Such evaluations, where applicable and pertinent, shall 
be used in lieu of actual measure of cost in determining the 
wage paid to any employee.
  (2)(A) In determining the wage an employer is required to pay 
a tipped employee, the amount paid such employee by the 
employee's employer shall be an amount equal to--
          [(i) the cash wage paid such employee which for 
        purposes of such determination shall be not less than 
        the cash wage required to be paid such an employee on 
        the date of the enactment of this paragraph; and]
          (i) the cash wage paid such employee, which for 
        purposes of such determination shall be not less than--
                  (I) for the 1-year period beginning on the 
                effective date under section 7 of the Raise the 
                Wage Act, $3.60 an hour;
                  (II) for each succeeding 1-year period until 
                the hourly wage under this clause equals the 
                wage in effect under section 6(a)(1) for such 
                period, an hourly wage equal to the amount 
                determined under this clause for the preceding 
                year, increased by the lesser of--
                          (aa) $1.50; or
                          (bb) the amount necessary for the 
                        wage in effect under this clause to 
                        equal the wage in effect under section 
                        6(a)(1) for such period, rounded up to 
                        the nearest multiple of $0.05; and
                  (III) for each succeeding 1-year period after 
                the increase made pursuant to subclause (II), 
                the minimum wage in effect under section 
                6(a)(1); and
          (ii) an additional amount on account of the tips 
        received by such employee which amount is equal to the 
        difference between the wage specified in clause (i) and 
        the wage in effect under section 6(a)(1).
The additional amount on account of tips may not exceed the 
value of the tips actually received by an employee. The 
preceding 2 sentences shall not apply with respect to any 
tipped employee unless such employee has been informed by the 
employer of the provisions [of this subsection, and all tips 
received by such employee have been retained by the employee] 
of this subsection. Any employee shall have the right to retain 
any tips received by such employee, except that this subsection 
shall not be construed to prohibit the pooling of tips among 
employees who customarily and regularly receive tips. An 
employer shall inform each employee of the right and exception 
provided under the preceding sentence.
[Subsections (a) and (b) of section 3 of H.R. 582 (as reported) 
provides for amendments to section 3(m)(2)(A) of the Fair Labor 
Standards Act of 1938, which are shown above. Subsection (c)(1) 
of section 3 of H.R. 582 (as reported) also provides for 
amendments to subparagraph (A) (as amended by subsections (a) 
and (b) of such section 3). Paragraph (3) of section 3(c) of 
H.R. 582 (as reported) provides: ``The amendments made by 
paragraphs (1) and (2) shall take effect on the date that is 
one day after the date on which the hourly wage under subclause 
(III) of section 3(m)(2)(A)(i) of the Fair Labor Standards Act 
of 1938 (29 U.S.C. 203(m)(2)(A)(i)), as amended by subsection 
(a), takes effect.''. The following version of subparagraph (A) 
reflects the amendments made to it by subsections (a), (b), and 
(c)(1) of section 3 of H.R. 582.]
  (A) [In determining the wage an employer is required to pay a 
tipped employee, the amount paid such employee by the 
employee's employer shall be an amount equal to--]
          [(i) the cash wage paid such employee, which for 
        purposes of such determination shall be not less than--
                  [(I) for the 1-year period beginning on the 
                effective date under section 7 of the Raise the 
                Wage Act, $3.60 an hour;
                  [(II) for each succeeding 1-year period until 
                the hourly wage under this clause equals the 
                wage in effect under section 6(a)(1) for such 
                period, an hourly wage equal to the amount 
                determined under this clause for the preceding 
                year, increased by the lesser of--
                          [(aa) $1.50; or
                          [(bb) the amount necessary for the 
                        wage in effect under this clause to 
                        equal the wage in effect under section 
                        6(a)(1) for such period, rounded up to 
                        the nearest multiple of $0.05; and
                  [(III) for each succeeding 1-year period 
                after the increase made pursuant to subclause 
                (II), the minimum wage in effect under section 
                6(a)(1); and
          [(ii) an additional amount on account of the tips 
        received by such employee which amount is equal to the 
        difference between the wage specified in clause (i) and 
        the wage in effect under section 6(a)(1).
The additional amount on account of tips may not exceed the 
value of the tips actually received by an employee. The 
preceding 2 sentences shall not apply with respect to any 
tipped employee unless such employee has been informed by the 
employer of the provisions of this subsection.] The wage 
required to be paid to a tipped employee shall be the wage set 
forth in section 6(a)(1). Any employee shall have the right to 
retain any tips received by such employee, except that this 
subsection shall not be construed to prohibit the pooling of 
tips among employees who customarily and regularly receive 
tips. An employer shall inform each employee of the right and 
exception provided under the preceding sentence.
  (B) An employer may not keep tips received by its employees 
for any purposes, including allowing managers or supervisors to 
keep any portion of employees' tips, regardless of whether or 
not the employer takes a tip credit.
  (n) ``Resale'' shall not include the sale of goods to be used 
in residential or farm building construction, repair, or 
maintenance: Provided, That the sale is recognized as a bona 
fide retail sale in the industry.
  (o) Hours Worked.--In determining for the purposes of 
sections 6 and 7 the hours for which an employee is employed, 
there shall be excluded any time spent in changing clothes or 
washing at the beginning or end of each workday which was 
excluded from measured working time during the week involved by 
the express terms of or by custom or practice under a bona fide 
collective-bargaining agreement applicable to the particular 
employee.
  (p) ``American vessel'' includes any vessel which is 
documented or numbered under the laws of the United States.
  (q) ``Secretary'' means the Secretary of Labor.
  (r)(1) ``Enterprise'' means the related activities performed 
(either through unified operation or common control) by any 
person or persons for a common business purpose, and includes 
all such activities whether performed in one or more 
establishments or by one or more corporate or other 
organizational units including departments of an establishment 
operated through leasing arrangements, but shall not include 
the related activities performed for such enterprise by an 
independent contractor. Within the meaning of this subsection, 
a retail or service establishment which is under independent 
ownership shall not be deemed to be so operated or controlled 
as to be other than a separate and distinct enterprise by 
reason of any arrangement, which includes, but is not 
necessarily limited to, an agreement, (A) that it will sell, or 
sell only, certain goods specified by a particular 
manufacturer, distributor, or advertiser, or (B) that it will 
join with other such establishments in the same industry for 
the purpose of collective purchasing, or (C) that it will have 
the exclusive rights to sell the goods or use the brand name of 
a manufacturer, distributor, or advertiser within a specified 
area, or by reason of the fact that it occupies premises leased 
to it by a person who also leases premises to other retail or 
service establishments.
  (2) For purposes of paragraph (1), the activities performed 
by any person or persons--
          (A) in connection with the operation of a hospital, 
        an institution primarily engaged in the care of the 
        sick, the aged, the mentally ill or defective who 
        reside on the premises of such institution, a school 
        for mentally or physicially handicapped or gifted 
        children, a preschool, elementary or secondary school, 
        or an institution of higher education (regardless of 
        whether or not such hospital, institution, or school is 
        operated for profit or not for profit), or
          (B) in connection with the operation of a street, 
        suburban or interurban electric railway, or local 
        trolley or motorbus carrier, if the rates and services 
        of such railway or carrier are subject to regulation by 
        a State or local agency (regardless of whether or not 
        such railway or carrier is public or private or 
        operated for profit or not for profit), or
          (C) in connection with the activities of a public 
        agency.
shall be deemed to be activities performed for a business 
purpose.
  (s)(1) ``Enterprise engaged in commerce or in the production 
of goods for commerce'' means an enterprise that--
          (A)(i) has employees engaged in commerce or in the 
        production of goods for commerce, or that has employees 
        handling, selling, or otherwise working on goods or 
        materials that have been moved in or produced for 
        commerce by any person; and
          (ii) is an enterprise whose annual gross volume of 
        sales made or business done is not less than $500,000 
        (exclusive of excise taxes at the retail level that are 
        separately stated);
          (B) is engaged in the operation of a hospital, an 
        institution primarily engaged in the care of the sick, 
        the aged, or the mentally ill or defective who reside 
        on the premises of such institution, a school for 
        mentally or physically handicapped or gifted children, 
        a preschool, elementary or secondary school, or an 
        institution of higher education (regardless of whether 
        or not such hospital, institution, or school is public 
        or private or operated for profit or not for profit); 
        or
          (C) is an activity of a public agency.
  (2) Any establishment that has as its only regular employees 
the owner thereof or the parent, spouse, child, or other member 
of the immediate family of such owner shall not be considered 
to be an enterprise engaged in commerce or in the production of 
goods for commerce or a part of such an enterprise. The sales 
of such an establishment shall not be included for the purpose 
of determining the annual gross volume of sales of any 
enterprise for the purpose of this subsection.
  (t) ``Tipped employee'' means any employee engaged in an 
occupation in which he customarily and regularly receives more 
than $30 a month in tips.
  (u) ``Man-day'' means any day during which an employee 
performs any agricultural labor for not less than one hour.
  (v) ``Elementary school'' means a day or residential school 
which provides elementary education, as determined under State 
law.
  (w) ``Secondary school'' means a day or residential school 
which provides secondary education, as determined under State 
law.
  (x) ``Public agency'' means the Government of the United 
States; the government of a State or political subdivision 
thereof; any agency of the United States (including the United 
States Postal Service and Postal Rate Commission), a State, or 
a political subdivision of a State; or any interstate 
governmental agency.
  (y) ``Employee in fire protection activities'' means an 
employee, including a firefighter, paramedic, emergency medical 
technician, rescue worker, ambulance personnel, or hazardous 
materials worker, who--
          (1) is trained in fire suppression, has the legal 
        authority and responsibility to engage in fire 
        suppression, and is employed by a fire department of a 
        municipality, county, fire district, or State; and
          (2) is engaged in the prevention, control, and 
        extinguishment of fires or response to emergency 
        situations where life, property, or the environment is 
        at risk.

           *       *       *       *       *       *       *


                             minimum wages

  Sec. 6. (a) Every employer shall pay to each of his employees 
who in any workweek is engaged in commerce or in the production 
of goods for commerce, or is employed in an enterprise engaged 
in commerce or in the production of goods for commerce, wages 
at the following rates:
          [(1) except as otherwise provided in this section, 
        not less than--
                  [(A) $5.85 an hour, beginning on the 60th day 
                after the date of enactment of the Fair Minimum 
                Wage Act of 2007;
                  [(B) $6.55 an hour, beginning 12 months after 
                that 60th day; and
                  [(C) $7.25 an hour, beginning 24 months after 
                that 60th day;]
          (1) except as otherwise provided in this section, not 
        less than--
                  (A) $8.55 an hour, beginning on the effective 
                date under section 7 of the Raise the Wage Act;
                  (B) $9.85 an hour, beginning 1 year after 
                such effective date;
                  (C) $11.15 an hour, beginning 2 years after 
                such effective date;
                  (D) $12.45 an hour, beginning 3 years after 
                such effective date;
                  (E) $13.75 an hour, beginning 4 years after 
                such effective date;
                  (F) $15.00 an hour, beginning 5 years after 
                such effective date; and
                  (G) beginning on the date that is 6 years 
                after such effective date, and annually 
                thereafter, the amount determined by the 
                Secretary under subsection (h);
          (2) if such employee is a home worker in Puerto Rico 
        or the Virgin Islands, not less than the minimum piece 
        rate prescribed by regulation or order; or, if no such 
        minimum piece rate is in effect, any piece rate adopted 
        by such employer which shall yield, to the proportion 
        or class of employees prescribed by regulation or 
        order, not less than the applicable minimum hourly wage 
        rate. Such minimum piece rates or employer piece rates 
        shall be commensurate with, and shall be paid in lieu 
        of, the minimum hourly wage rate applicable under the 
        provisions of this section. The Secretary of Labor, or 
        his authorized representative, shall have power to make 
        such regulations or orders as are necessary or 
        appropriate to carry out any of the provisions of this 
        paragraph, including the power without limiting the 
        generality of the foregoing, to define any operation or 
        occupation which is performed by such home work 
        employees in Puerto Rico or the Virgin Islands; to 
        establish minimum piece rates for any operation or 
        occupation so defined; to prescribe the method and 
        procedure for ascertaining and promulgating minimum 
        piece rates; to prescribe standards for employer piece 
        rates, including the proportion or class of employees 
        who shall receive not less than the minimum hourly wage 
        rate; to define the term ``home worker''; and to 
        prescribe the conditions under which employers, agents, 
        contractors, and subcontractors shall cause goods to be 
        produced by home workers;
          (3) if such employee is employed as a seaman on an 
        American vessel, not less than the rate which will 
        provide to the employee, for the period covered by the 
        wage payment, wages equal to compensation at the hourly 
        rate prescribed by paragraph (1) of this subsection for 
        all hours during such period when he was actually on 
        duty (including periods aboard ship when the employee 
        was on watch or was, at the direction of a superior 
        officer, performing work or standing by, but not 
        including off-duty periods which are provided pursuant 
        to the employment agreement); or
          (4) if such employee is employed in agriculture, not 
        less than the minimum wage rate in effect under 
        paragraph (1) after December 31, 1977.
  (b) Every employer shall pay to each of his employees (other 
than an employee to whom subsection (a)(5) applies) who in any 
workweek is engaged in commerce or in the production of goods 
for commerce, or is employed in an enterprise engaged in 
commerce or in the production of goods for commerce, and who in 
such workweek is brought within the purview of this section by 
the amendments made to this Act by the Fair Labor Standards 
Amendments of 1966, title IX of the Education Amendments of 
1972, or the Fair Labor Standards Amendments of 1974, wages at 
the following rate: Effective after December 31, 1977, not less 
than the minimum wage rate in effect under subsection (a)(1).
  (d)(1) No employer having employees subject to any provisions 
of this section shall discriminate, within any establishment in 
which such employees are employed, between employees on the 
basis of sex by paying wages to employees in such establishment 
at a rate less than the rate at which he pays wages to 
employees of the opposite sex in such establishment for equal 
work on jobs the performance of which requires equal skill, 
effort, and responsibility, and which are performed under 
similar working conditions, except where such payment is made 
pursuant to (i) a seniority system; (ii) a merit system; (iii) 
a system which measures earnings by quantity or quality or 
production; or (iv) a differential based on any other factor 
other than sex: Provided, That an employer who is paying a wage 
rate differential in violation of this subsection shall not, in 
order to comply with the provisions of this subsection, reduce 
the wage rate of any employee.
  (2) No labor organization, or its agents, representing 
employees of an employer having employees subject to any 
provisions of this section shall cause or attempt to cause such 
an employer to discriminate against an employee in violation of 
paragraph (1) of this subsection.
  (3) For purposes of administration and enforcement, any 
amounts owing to any employees which have been withheld in 
violation of this subsection shall be deemed to be unpaid 
minimum wages or unpaid overtime-compensation under this Act.
  (4) As used in this subsection, the term ``labor 
organization'' means any organization of any kind, or any 
agency or employee representation committee or plan, in which 
employees participate and which exists for the purpose, in 
whole or in part, of dealing with employers concerning 
grievances, labor disputes, wages, rates of pay, hours of 
employment, or conditions of work.
  (e)(1) Notwithstanding the provisions of section 13 of this 
Act (except subsections (a)(1) and (f) thereof), every employer 
providing any contract services (other than linen supply 
services) under a contract with the United States or any 
subcontract thereunder shall pay to each of his employees whose 
rate of pay is not governed by the Service Contract Act of 1965 
(41 U.S.C. 351-357) or to whom subsection (a)(1) of this 
section is not applicable, wages at rates not less than the 
rates provided for in subsection (b) of this section.
  (2) Notwithstanding the provisions of section 13 of this Act 
(except subsections (a)(1) and (f) thereof) and the provisions 
of the Service Contract Act of 1965, every employer in an 
establishment providing linen supply services to the United 
States under a contract with the United States or any 
subcontract thereunder shall pay to each of his employees in 
such establishment wages at rates not less than those 
prescribed in subsection (b), except that if more than 50 per 
centum of the gross annual dollar volume of sales made or 
business done by such establishment is derived from providing 
such linen supply services under any such contracts or 
subcontracts, such employer shall pay to each of his employees 
in such establishment wages at rates not less than those 
prescribed in subsection (a)(1) of this section.
  (f) Any employee--
          (1) who in any workweek is employed in domestic 
        service in a household shall be paid wages at a rate 
        not less than the wage rate in effect under section 
        6(b) unless such employee's compensation for such 
        service would not because of section 209(a)(6) of the 
        Social Security Act constitute wages for the purpose of 
        title II of such Act, or
          (2) who in any workweek--
                  (A) is employed in domestic service in one or 
                more households, and
                  (B) is so employed for more than 8 hours in 
                the aggregate,
        shall be paid wages for such employment in such 
        workweek at a rate not less than the wage rate in 
        effect under section 6(b).
  (g)(1) In lieu of the rate prescribed by subsection (a)(1), 
any employer may pay any employee of such employer, during the 
first 90 consecutive calendar days after such employee is 
initially employed by such employer, [a wage which is not less 
than $4.25 an hour.] a wage at a rate that is not less than--
          (A) for the 1-year period beginning on the effective 
        date under section 7 of the Raise the Wage Act, $5.50 
        an hour; 
          (B) for each succeeding 1-year period until the 
        hourly wage under this paragraph equals the wage in 
        effect under section 6(a)(1) for such period, an hourly 
        wage equal to the amount determined under this 
        paragraph for the preceding year, increased by the 
        lesser of--
                  (i) $1.25; or 
                  (ii) the amount necessary for the wage in 
                effect under this paragraph to equal the wage 
                in effect under section 6(a)(1) for such 
                period, rounded up to the nearest multiple of 
                $0.05; and 
          (C) for each succeeding 1-year period after the 
        increase made pursuant to subparagraph (B)(ii), the 
        minimum wage in effect under section 6(a)(1). 
  (2) In lieu of the rate prescribed by subsection (a)(1), the 
Governor of Puerto Rico, subject to the approval of the 
Financial Oversight and Management Board established pursuant 
to section 101 of the Puerto Rico Oversight, Management, and 
Economic Stability Act, may designate a time period not to 
exceed four years during which employers in Puerto Rico may pay 
employees who are initially employed after the date of 
enactment of such Act a wage which is not less than the wage 
described in paragraph (1). Notwithstanding the time period 
designated, such wage shall not continue in effect after such 
Board terminates in accordance with section 209 of such Act.
  (3) No employer may take any action to displace employees 
(including partial displacements such as reduction in hours, 
wages, or employment benefits) for purposes of hiring 
individuals at the wage authorized in paragraph (1) or (2).
  (4) Any employer who violates this subsection shall be 
considered to have violated section 15(a)(3) (29 U.S.C. 
215(a)(3)).
  (5) This subsection shall only apply to an employee who has 
not attained the age of 20 years, except in the case of the 
wage applicable in Puerto Rico, 25 years, until such time as 
the Board described in paragraph (2) terminates in accordance 
with section 209 of the Act described in such paragraph.
[Section 4(a) of H.R. 582 (as reported) provides for an 
amendment to section 6(g)(1) of the Fair Labor Standards Act of 
1938, which is shown above. Subsection (b)(1) of section 4 of 
H.R. 582 (as reported) also provides for an amendment to repeal 
subsection (g) of section 6 (as amended by subsection (a) of 
such section 4). Paragraph (3) of section 4(b) of H.R. 582 (as 
reported) provides: ``The repeal and amendment made by 
paragraphs (1) and (2), respectively, shall take effect on the 
date that is one day after the date on which the hourly wage 
under subparagraph (C) of section 6(g)(1) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 206(g)(1)), as amended by 
subsection (a), takes effect.''. The following version of 
subsection (g) reflects the amendments made to it by 
subsections (a) and (b)(1) of section 4 of H.R. 582.]
  [(g)(1) In lieu of the rate prescribed by subsection (a)(1), 
any employer may pay any employee of such employer, during the 
first 90 consecutive calendar days after such employee is 
initially employed by such employer, a wage at a rate that is 
not less than--
          [(A) for the 1-year period beginning on the effective 
        date under section 7 of the Raise the Wage Act, $5.50 
        an hour;
          [(B) for each succeeding 1-year period until the 
        hourly wage under this paragraph equals the wage in 
        effect under section 6(a)(1) for such period, an hourly 
        wage equal to the amount determined under this 
        paragraph for the preceding year, increased by the 
        lesser of--
                  [(i) $1.25; or
                  [(ii) the amount necessary for the wage in 
                effect under this paragraph to equal the wage 
                in effect under section 6(a)(1) for such 
                period, rounded up to the nearest multiple of 
                $0.05; and
          [(C) for each succeeding 1-year period after the 
        increase made pursuant to subparagraph (B)(ii), the 
        minimum wage in effect under section 6(a)(1).
  [(2) In lieu of the rate prescribed by subsection (a)(1), the 
Governor of Puerto Rico, subject to the approval of the 
Financial Oversight and Management Board established pursuant 
to section 101 of the Puerto Rico Oversight, Management, and 
Economic Stability Act, may designate a time period not to 
exceed four years during which employers in Puerto Rico may pay 
employees who are initially employed after the date of 
enactment of such Act a wage which is not less than the wage 
described in paragraph (1). Notwithstanding the time period 
designated, such wage shall not continue in effect after such 
Board terminates in accordance with section 209 of such Act.
  [(3) No employer may take any action to displace employees 
(including partial displacements such as reduction in hours, 
wages, or employment benefits) for purposes of hiring 
individuals at the wage authorized in paragraph (1) or (2).
  [(4) Any employer who violates this subsection shall be 
considered to have violated section 15(a)(3) (29 U.S.C. 
215(a)(3)).
  [(5) This subsection shall only apply to an employee who has 
not attained the age of 20 years, except in the case of the 
wage applicable in Puerto Rico, 25 years, until such time as 
the Board described in paragraph (2) terminates in accordance 
with section 209 of the Act described in such paragraph.]
  (h)(1) Not later than each date that is 90 days before a new 
minimum wage determined under subsection (a)(1)(G) is to take 
effect, the Secretary shall determine the minimum wage to be in 
effect under this subsection for each period described in 
subsection (a)(1)(G). The wage determined under this subsection 
for a year shall be--
          (A) not less than the amount in effect under 
        subsection (a)(1) on the date of such determination;
          (B) increased from such amount by the annual 
        percentage increase, if any, in the median hourly wage 
        of all employees as determined by the Bureau of Labor 
        Statistics; and
          (C) rounded up to the nearest multiple of $0.05.
  (2) In calculating the annual percentage increase in the 
median hourly wage of all employees for purposes of paragraph 
(1)(B), the Secretary, through the Bureau of Labor Statistics, 
shall compile data on the hourly wages of all employees to 
determine such a median hourly wage and compare such median 
hourly wage for the most recent year for which data are 
available with the median hourly wage determined for the 
preceding year.
  (i) Not later than 60 days prior to the effective date of any 
increase in the required wage determined under subsection 
(a)(1) or subparagraph (B) or (C) of subsection (g)(1), or in 
accordance with subclause (II) or (III) of section 
3(m)(2)(A)(i) or section 14(c)(1)(A), the Secretary shall 
publish in the Federal Register and on the website of the 
Department of Labor a notice announcing each increase in such 
required wage.
[Section 5 of H.R. 582 (as reported) provides for an amendment 
to add a new subsection (i) at the end of section 6 of the Fair 
Labor Standards Act of 1938, which is shown above. Sections 
3(c)(2), 4(b)(2), and 6(b)(1) of H.R. 582 (as reported) also 
provide for amendments to section 6(i). For the delayed 
effective dates to these amendments, see sections 3(c)(3), 
4(b)(3), and 6(b)(2) of H.R. 582 (as reported). The following 
version of subsection (i) reflects all amendments by sections 
3(c)(2), 4(b)(2), 5, and 6(b)(1) of H.R. 582.]
  (i) Not later than 60 days prior to the effective date of any 
increase in the required wage determined under subsection 
(a)(1) [or subparagraph (B) or (C) of subsection (g)(1), or in 
accordance with subclause (II) or (III) of section 
3(m)(2)(A)(i) or section 14(c)(1)(A),] the Secretary shall 
publish in the Federal Register and on the website of the 
Department of Labor a notice announcing each increase in such 
required wage.

           *       *       *       *       *       *       *


        learners, apprentices, students, and handicapped workers

  Sec. 14. (a) The Secretary, to the extent necessary in order 
to prevent curtailment of opportunities for employment, shall 
by regulations or by orders provide for the employment of 
learners, of apprentices, and messengers employed primarily in 
delivering letters and messages, under special certificates 
issued pursuant to regulations of the Secretary, at such wages 
lower than the minimum wage applicable under section 6 and 
subject to such limitations as to time, number, proportion, and 
length of service as the Secretary shall prescribe.
  (b)(1)(A) The Secretary, to the extent necessary in order to 
prevent curtailment of opportunities for employment, shall by 
special certificate issued under a regulation or order provide, 
in accordance with subparagraph (B), for the employment, at a 
wage rate not less than 85 per centum of the otherwise 
applicable wage rate in effect under section 6 or not less than 
$1.60 an hour, whichever is the higher, of full-time students 
(regardless of age but in compliance with applicable child 
labor laws) in retail or service establishments.
  (B) Except as provided in paragraph (4)(B), during any month 
in which full-time students are to be employed in any retail or 
service establishment under certificates issued under this 
subsection the proportion of student hours of employment to the 
total hours of employment of all employees in such 
establishment may not exceed--
          (i) in the case of a retail or service establishment 
        whose employees (other than employees engaged in 
        commerce or in the production of goods for commerce) 
        were covered by this Act before the effective date of 
        the Fair Labor Standards Amendments of 1974--
                  (I) the proportion of student hours of 
                employment to the total hours of employment of 
                all employees in such establishment for the 
                corresponding month of the immediately 
                preceding twelve-month period,
                  (II) the maximum proportion for any 
                corresponding month of student hours of 
                employment to the total hours of employment of 
                all employees in such establishment applicable 
                to the issuance of certificates under this 
                section at any time before the effective date 
                of the Fair Labor Standards Amendments of 1974 
                for the employment of students by such 
                employer, or
                  (III) a proportion equal to one-tenth of the 
                total hours of employment of all employees in 
                such establishment,
        whichever is greater;
          (ii) in the case of retail or service establishment 
        whose employees (other than employees engaged in 
        commerce or in the production of goods for commerce) 
        are covered for the first time on or after the 
        effective date of the Fair Labor Standards Amendments 
        of 1974--
                  (I) the proportion of hours of employment of 
                students in such establishment to the total 
                hours of employment of all employees in such 
                establishment for the corresponding month of 
                the twelve-month period immediately prior to 
                the effective date of such Amendments,
                  (II) the proportion of student hours of 
                employment to the total hours of employment of 
                all employees in such establishment for the 
                corresponding month of immediately preceding 
                twelve-month period, or
                  (III) a proportion equal to one-tenth of the 
                total hours of employment of all employees in 
                such establishment,
        whichever is greater; or
          (iii) in the case of a retail or service 
        establishment for which records of student hours worked 
        are not available, the proportion of students hours of 
        employment to the total hours of employment of all 
        employees based on the practice during the immediately 
        preceding twelve-month period in (I) similar 
        establishments of the same employer in the same general 
        metropolitan area in which such establishment is 
        located, (II) similar establishments of the same or 
        nearby communities if such establishment is not in a 
        metropolitan area, or (III) other establishments of the 
        same general character operating in the community or 
        the nearest comparable community.
For purpose of clauses (i), (ii), and (iii) of this 
subparagraph, the term ``student hours of employment'' means 
hours during which students are employed in a retail or service 
establishment under certificates issued under this subsection.
  (2) The Secretary, to the extent necessary in order to 
prevent curtailment of opportunities for employment, shall by 
special certificate issued under a regulation or order provide 
for the employment, at a wage rate not less than 85 per centum 
of the wage rate in effect under section 6(a)(5) or not less 
than $1.30 an hour, whichever is the higher, of full-time 
students (regardless of age but in compliance with applicable 
child labor laws) in any occupation in agriculture.
  (3) The Secretary, to the extent necessary in order to 
prevent curtailment of opportunities for employment, shall by 
special certificate issued under a regulation or order provide 
for the employment by an institution of higher education, at a 
wage rate not less than 85 per centum of the otherwise 
applicable wage rate in effect under section 6 or not less than 
$1.60 an hour, whichever is the higher, of full-time students 
(regardless of age but in compliance with applicable child 
labor laws) who are enrolled in such institution. The Secretary 
shall by regulation prescribe standards and requirements to 
insure that this paragraph will not create a substantial 
probability of reducing the full-time employment opportunities 
of persons other than those to whom the minimum wage rate 
authorized by this paragraph is applicable.
  (4)(A) A special certificate issued under paragraph (1), (2), 
or (3) shall provide that the student or students for whom it 
is issued shall, except during vacation periods, be employed on 
a part-time basis and not in excess of twenty hours in any 
workweek.
  (B) If the issuance of a special certificate under paragraph 
(1) or (2) for an employer will cause the number of students 
employed by such employer under special certificates issued 
under this subsection to exceed six, the Secretary may not 
issue such a special certificate for the employment of a 
student by such employer unless the Secretary finds employment 
of such student will not a create a substantial probability of 
reducing the full-time employment opportunities of persons 
other than those employed under special certificates issued 
under this subsection. If the issuance of a special certificate 
under paragraph (1) or (2) for an employer will not cause the 
number of students employed by such employer under special 
certificates issued under this subsection to exceed six--
          (i) the Secretary may issue a special certificate 
        under paragraph (1) or (2) for the employment of a 
        student by such employer if such employer certifies to 
        the Secretary that the employment of such student will 
        not reduce the full-time employment opportunities of 
        persons other than those employed under special 
        certificates issued under this subsection, and
          (ii) in the case of an employer which is a retail or 
        service establishment, subparagraph (B) of paragraph 
        (1) shall not apply with respect to the issuance of 
        special certificates for such employer under such 
        paragraph.
The requirement of this subparagraph shall not apply in the 
case of the issuance of special certificates under paragraph 
(3) for the employment of full-time students by institutions of 
higher education; except that if the Secretary determines that 
an institution of higher education is employing students under 
certificates issued under paragraph (3) but in violation of the 
requirements of that paragraph or of regulations issued 
thereunder, the requirements of this subparagraph shall apply 
with respect to the issuance of special certificates under 
paragraph (3) for the employment of students by such 
institution.
  (C) No special certificate may be issued under this 
subsection unless the employer for whom the certificate is to 
be issued provides evidence satisfactory to the Secretary of 
the student status of the employees to be employed under such 
special certificate.
  (D) To minimize paperwork for, and to encourage, small 
businesses to employ students under special certificates issued 
under paragraphs (1) and (2), the Secretary shall, by 
regulation or order, prescribe a simplified application form to 
be used by employers in applying for such a certificate for the 
employment of not more than six full-time students. Such an 
application shall require only--
          (i) a listing of the name, address, and business of 
        the applicant employer,
          (ii) a listing of the date the applicant began 
        business, and
          (iii) the certification that the employment of such 
        full-time students will not reduce the full-time 
        employment opportunities of persons other than persons 
        employed under special certificates.
  (c)(1) The Secretary, to the extent necessary to prevent 
curtailment of opportunities for employment, shall by 
regulation or order provide for the employment, under special 
certificates, of individuals (including individuals employed in 
agriculture) whose earning or productive capacity is impaired 
by age, physical or mental deficiency, or injury, at wages 
which are--
          [(A) lower than the minimum wage applicable under 
        section 6,]
          (A) at a rate that equals, or exceeds, for each year, 
        the greater of--
                  (i)(I) $4.25 an hour, beginning 1 year after 
                the date the wage rate specified in section 
                6(a)(1)(A) takes effect;
                  (II) $6.40 an hour, beginning 2 years after 
                such date;
                  (III) $8.55 an hour, beginning 3 years after 
                such date;
                  (IV) $10.70 an hour, beginning 4 years after 
                such date;
                  (V) $12.85 an hour, beginning 5 years after 
                such date; and
                  (VI) the wage rate in effect under section 
                6(a)(1), on the date that is 6 years after the 
                date the wage specified in section 6(a)(1)(A) 
                takes effect; or
                  (ii) if applicable, the wage rate in effect 
                on the day before the date of enactment of the 
                Raise the Wage Act for the employment, under a 
                special certificate issued under this 
                paragraph, of the individual for whom the wage 
                rate is being determined under this 
                subparagraph,
          (B) commensurate with those paid to nonhandicapped 
        workers, employed in the vicinity in which the 
        individuals under the certificates are employed, for 
        essentially the same type, quality, and quantity of 
        work, and
          (C) related to the individual's productivity.
  (2) The Secretary shall not issue a certificate under 
paragraph (1) unless the employer provides written assurances 
to the Secretary that--
          (A) in the case of individuals paid on an hourly rate 
        basis, wages paid in accordance with paragraph (1) will 
        be reviewed by the employer at periodic intervals at 
        least once every 6 months, and
          (B) wages paid in accordance with paragraph (1) will 
        be adjusted by the employer at periodic intervals, at 
        least once each year, to reflect changes in the 
        prevailing wage paid to experienced nonhandicapped 
        individuals employed in the locality for essentially 
        the same type of work.
  (3) Notwithstanding paragraph (1), no employer shall be 
permitted to reduce the hourly wage rate prescribed by 
certificate under this subsection in effect on June 1, 1986, of 
any handicapped individual for a period of two years from such 
date without prior authorization of the Secretary.
  (4) Nothing in this subsection shall be construed to prohibit 
an employer from maintaining or establishing work activities 
centers to provide therapeutic activities for handicapped 
clients.
  (5)(A) Notwithstanding any other provision of this 
subsection, any employee receiving a special minimum wage at a 
rate specified pursuant to this subsection or the parent or 
guardian of such an employee may petition the Secretary to 
obtain a review of such special minimum wage rate. An employee 
or the employee's parent or guardian may file such a petition 
for and in behalf of the employee or in behalf of the employee 
and other employees similarly situated. No employee may be a 
party to any such action unless the employee or the employee's 
parent or guardian gives consent in writing to become such a 
party and such consent is filed with the Secretary.
  (B) Upon receipt of a petition filed in accordance with 
subparagraph (A), the Secretary within 10 days shall assign the 
petition to an administrative law judge appointed pursuant to 
section 3105 of title 5, United States Code. The administrative 
law judge shall conduct a hearing on the record in accordance 
with section 554 of title 5, United States Code, with respect 
to such petition within 30 days after assignment.
  (C) In any such proceeding, the employer shall have the 
burden of demonstrating that the special minimum wage rate is 
justified as necessary in order to prevent curtailment of 
opportunities for employment.
  (D) In determining whether any special minimum wage rate is 
justified pursuant to subparagraph (C), the administrative law 
judge shall consider--
          (i) the productivity of the employee or employees 
        identified in the petition and the conditions under 
        which such productivity was measured; and
          (ii) the productivity of other employees performing 
        work of essentially the same type and quality for other 
        employers in the same vicinity.
  (E) The administrative law judge shall issue a decision 
within 30 days after the hearing provided for in subparagraph 
(B). Such action shall be deemed to be a final agency action 
unless within 30 days the Secretary grants a request to review 
the decision of the administrative law judge. Either the 
petitioner or the employer may request review by the Secretary 
within 15 days of the date of issuance of the decision by the 
administrative law judge.
  (F) The Secretary, within 30 days after receiving a request 
for review, shall review the record and either adopt the 
decision of the administrative law judge or issue exceptions. 
The decision of the administrative law judge, together with any 
exceptions, shall be deemed to be a final agency action.
  (G) A final agency action shall be subject to judicial review 
pursuant to chapter 7 of title 5, United States Code. An action 
seeking such review shall be brought within 30 days of a final 
agency action described in subparagraph (F).
          (6) Prohibition on new special certificates.--
        Notwithstanding paragraph (1), the Secretary shall not 
        issue a special certificate under this subsection to an 
        employer that was not issued a special certificate 
        under this subsection before the date of enactment of 
        the Raise the Wage Act.
          (7) Sunset.--Beginning on the day after the date on 
        which the wage rate described in paragraph 
        (1)(A)(i)(VI) takes effect, the authority to issue 
        special certificates under paragraph (1) shall expire, 
        and no special certificates issued under paragraph (1) 
        shall have any legal effect.
          (8) Transition assistance.--Upon request, the 
        Secretary shall provide--
                  (A) technical assistance and information to 
                employers issued a special certificate under 
                this subsection for the purposes of--
                          (i) transitioning the practices of 
                        such employers to comply with this 
                        subsection, as amended by the Raise the 
                        Wage Act; and
                          (ii) ensuring continuing employment 
                        opportunities for individuals with 
                        disabilities receiving a special 
                        minimum wage rate under this 
                        subsection; and
                  (B) information to individuals employed at a 
                special minimum wage rate under this 
                subsection, which may include referrals to 
                Federal or State entities with expertise in 
                competitive integrated employment.
  (d) The Secretary may by regulation or order provide that 
sections 6 and 7 shall not apply with respect to the employment 
by any elementary or secondary school of its students if such 
employment constitutes as determined under regulations 
prescribed by the Secretary, an integral part of the regular 
education program provided by such school and such employment 
is in accordance with applicable child labor laws.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

                              Introduction

    In recent years, the far-left has begun to call for 
socialist policies like free college and universal health care 
and now Committee Democrats are jumping on board by considering 
H.R. 582, legislation to hike the federal minimum wage from 
$7.25 to $15 an hour. Instead of providing tangible benefits to 
working class Americans, a bill to increase the federal minimum 
wage by 107 percent would cause the most harm to the very 
people its supporters claim to benefit. Studies cited below, 
including from the Congressional Budget Office (CBO), show 
significant job losses resulting from such an increase. Lesser-
skilled workers in entry-level jobs, Americans without a GED, 
and tipped employees would bear the brunt of job losses caused 
by the mandate. Committee Republicans know that instead of 
reducing poverty, a radical, one-size-fits-all minimum wage 
hike would redistribute poverty.
    Such a radical minimum wage hike would not happen in a 
vacuum and would have a number of severely negative 
consequences. Mandating a $15 federal minimum wage would harm 
students, as it would have a negative impact on youth 
employment as most workers paid the minimum wage are below the 
age of 25. These are individuals at the start of their careers 
or filling part-time or summer jobs, and raising the minimum 
wage to $15 an hour puts these types of jobs at risk of being 
eliminated altogether.
    More than doubling the current federal minimum wage would 
harm businesses, especially small and local businesses, and the 
economy. This kind of unprecedented, one-size-fits-all mandate 
would force many job creators to reduce workers' hours, let 
employees go, or close their doors for good. The development 
would also lead to accelerated workplace automation, something 
that many Democrats oppose.
    Currently, wages are on the rise thanks to a booming 
economy, the Republican Tax Cuts and Jobs Act, and elimination 
of unnecessary regulations. With more than 7 million unfilled 
jobs nationwide, job creators know they must offer competitive 
wages and benefits to attract and retain workers. Congress 
should be cautious when considering a policy that would 
interfere with this positive momentum for workers. For these 
reasons, and as set forth more fully below, Committee 
Republicans are united in their opposition to H.R. 582.

                   Negative Consequences of H.R. 582

    Committee Republicans are justifiably concerned about many 
severely negative consequences of the bill for workers, 
students, small businesses, and the economy, including the 
following:

     H.R. 582 IMPOSES A RADICAL AND UNPRECEDENTED MINIMUM WAGE HIKE

    Imposing a 107 percent increase in the federal minimum wage 
to $15 would be a historically radical and unprecedented 
mandate. The last increase in the federal minimum wage was 41 
percent, but prior increases were ``typically lower.''\1\ In 
the federal minimum wage's history, it has been an average of 
$7.40 in today's dollars, slightly above the current wage rate 
of $7.25 per hour.\2\ If the minimum wage had been indexed to 
inflation in 2010, it would have been $8.35 in 2018, based on 
the Bureau of Labor Statistics' consumer price index. According 
to CBO, the federal minimum wage reached its peak in 1968, when 
its value in 2013 dollars was $8.41 if the conversion is done 
with the price index for personal consumption expenditures 
published by the U.S. Bureau of Economic Analysis, which is the 
index CBO favors.\3\
---------------------------------------------------------------------------
    \1\CBO, The Effects of a Minimum-Wage Increase on Employment and 
Family Income 23 n.8 (Feb. 2014).
    \2\Empl. Policies Inst., The Impact of a $15 Minimum Wage 2 (Jan. 
2019), https://www.epionline.org/wp-content/uploads/2019/01/
EPI_NationalMWDocument.pdf.
    \3\CBO, supra note 1, at 4 n.6.
---------------------------------------------------------------------------
    Dr. Douglas Holtz-Eakin, former director of CBO, described 
in his testimony the magnitude of the minimum wage hike 
proposed in H.R. 582:

          The federal government has never implemented a 
        minimum wage hike of this magnitude and only a few 
        cities are beginning to implement $15 per hour minimum 
        wages. It cannot be understated, however, that a 
        minimum wage increase this large (over 100 percent) 
        poses a major disruption to the U.S. labor market. 
        Unfortunately, the low-wage workers the policy is 
        intended to help would be the very ones who would most 
        suffer these consequences.\4\
---------------------------------------------------------------------------
    \4\Gradually Raising the Minimum Wage to $15: Good for Workers, 
Good for Businesses, and Good for the Economy: Hearing Before the H. 
Comm. on Educ. and Labor, 116th Cong. (2019) (statement of Douglas 
Holtz-Eakin, President, American Action Forum, at 4).

    Dr. Michael R. Strain, Director of Economic Policy Studies 
at the American Enterprise Institute, stated in his testimony 
that a 107 percent increase to the federal minimum wage would 
---------------------------------------------------------------------------
be an unprecedented change in policy:

          A $15 minimum wage is outside both the national and 
        international evidence base. . . . A $15 per hour 
        federal minimum wage is a large and risky gamble, and 
        is outside our evidence base, because it is such a high 
        minimum wage relative to the existing distribution of 
        wage rates. . . . [A] $15 per hour federal minimum wage 
        is not a modest policy change. It is a very large 
        policy change. It will impact a very large share of the 
        labor market. Such a large increase in the minimum wage 
        would send labor market policy into uncharted waters, 
        and would risk harming the very groups of workers and 
        individuals the policy is designed to help.\5\
---------------------------------------------------------------------------
    \5\Id. (statement of Michael R. Strain, Ph.D., Director of Economic 
Policy Studies, American Enterprise Institute, at 4-5).

    A survey of 197 U.S. economists conducted in February 2019 
found that 84 percent believe a $15 federal minimum wage would 
have negative effects on youth employment, and 77 percent 
believe it would have a negative impact on jobs available.\6\ 
Even President Obama's former Chairman of Economic Advisers 
argued in October 2015 that raising the minimum wage to $15 
would ``put us in uncharted waters, and risk undesirable and 
unintended consequences.''\7\
---------------------------------------------------------------------------
    \6\Lloyd Corder, Corcom, Inc., Carnegie Mellon Univ., Survey of US 
Economists on a $15 Federal Minimum Wage 4 (Mar. 2019), https://
www.epionline.org/wp-content/uploads/2019/03/EPI_Feb2019_MinWageSurvey-
FINAL.pdf.
    \7\Alan B. Krueger, The Minimum Wage: How Much Is Too Much?, N.Y. 
TIMES, Oct. 9, 2015.
---------------------------------------------------------------------------

               H.R. 582 WOULD CAUSE EXTENSIVE JOB LOSSES

    Raising the federal minimum wage to $15 would cause 
extensive and disruptive job losses and harm entry-level 
workers in many regions around the country. In a comprehensive 
report issued in July 2019, CBO estimates that up to 3.7 
million jobs would be lost from a minimum wage increase to $15, 
with a median impact of 1.3 million workers becoming jobless 
because of the wage hike.\8\ Even under the estimated median 
impact, 7 percent of workers directly affected by the minimum 
wage hike would lose their jobs.\9\ Significantly, of those 
losing their jobs, 60 percent would be female workers, 46 
percent would be young workers, and 38 percent would have less 
than a high school diploma.\10\
---------------------------------------------------------------------------
    \8\CBO, The Effects on Employment and Family Income of Increasing 
the Federal Minimum Wage (July 2019).
    \9\Id. at 12.
    \10\Id. at 14.
---------------------------------------------------------------------------
    CBO also estimates that a $15 federal minimum wage would 
lift 1.3 million individuals out of poverty.\11\ Therefore, 
H.R. 582 would cause at least one job to be lost for every 
person who moved out of poverty, and in the worst-case scenario 
estimated by CBO, as many as three jobs would be lost for every 
individual moving out of poverty. As such, H.R. 582 creates a 
very ill-advised and undesirable trade off.
---------------------------------------------------------------------------
    \11\Id. at 3.
---------------------------------------------------------------------------
    In addition, CBO found that there would be a net reduction 
in family income of $9 billion resulting from a $15 minimum 
wage--in other words, the so-called raise mandated by H.R. 582 
will reduce pay for many American families.\12\ Overall, the 
recent CBO study demonstrates that the unprecedented, one-size-
fits-all wage hike dictated in H.R. 582 would hurt workers and 
small businesses, and force many job creators to cope by 
reducing workers' hours, eliminating workers' jobs, increasing 
automation, or closing their doors for good.
---------------------------------------------------------------------------
    \12\Id. at 2.
---------------------------------------------------------------------------
    Furthermore, Dr. Holtz-Eakin, using the methodology from 
CBO's 2014 minimum wage report,\13\ estimated that increasing 
the federal minimum wage to $15 by 2024 would result in a loss 
of 9.6 million jobs, nearly as much as the 10.2 million jobs 
added to the U.S. economy since the end of 2014.\14\ Dr. 
Strain's testimony agreed regarding the negative effects on 
employment: ``I expect that raising the federal minimum wage to 
$15 per hour would significantly reduce employment among lower-
skilled workers and less-experienced workers.''\15\
---------------------------------------------------------------------------
    \13\See CBO, supra note 1.
    \14\Holtz-Eakin, supra note 4, at 4.
    \15\Strain, supra note 5, at 4.
---------------------------------------------------------------------------

          H.R. 582 WOULD HARM ENTRY-LEVEL WORKERS AND STUDENTS

    Minimum wage workers tend to be young. In 2017, while 
workers under 25 were only about one-fifth of all hourly paid 
workers, they were about half of those paid the minimum wage or 
less. While workers 21 and under were only 11.1 percent of all 
hourly workers, 36 percent were paid the minimum wage or 
less.\16\ However, entry-level workers do not continue earning 
the minimum wage for long. Approximately two-thirds of minimum 
wage workers who remain in the workforce receive a raise within 
one year.\17\ Dr. Strain noted in his testimony the importance 
of the first job for younger workers as they move up the 
economic ladder: ``Young workers need to get their start in the 
labor market, using their first jobs to learn and gain valuable 
experience.''\18\
---------------------------------------------------------------------------
    \16\U.S. Dep't of Lab., Bureau of Lab. Stat., Characteristics of 
Minimum Wage Workers, 2017 (Mar. 2018).
    \17\Empl. Policies Inst., supra note 2, at 3.
    \18\Strain, supra note 5, at 7.
---------------------------------------------------------------------------
    As mentioned above, a survey of 197 economists found that 
84 percent believe raising the federal minimum wage to $15 will 
harm youth employment. Dr. Holtz-Eakin's testimony referred to 
a comprehensive review of 100 minimum wage studies, which found 
that two-thirds of the studies ``indicate that increasing the 
minimum wage negatively effects employment, especially among 
low-skill workers.'' Later research shows that minimum wage 
increases ``harm low-income workers in a variety of other ways, 
such as job loss, slowdown in hiring, increasing prices, firms 
replacing low-skilled workers with more productive workers, and 
firms shutting down all together.'' For example, Jeffrey 
Clemens and Michael Wither found in 2014 that the last time 
Congress increased the minimum wage, job losses among workers 
earning less than $7.50 were ``so severe that their earnings, 
on net, declined. . . . [E]mployment in this group fell by 8 
percent, translating to about 1.7 million jobs.'' Further, 
``net average monthly incomes for low-wage workers [fell] by 
$100 during the first year after the minimum wage increase and 
by an additional $50 in the following two years.''\19\
---------------------------------------------------------------------------
    \19\Holtz-Eakin, supra note 4, at 4, 7.
---------------------------------------------------------------------------
    Seattle's experience with a $15 minimum wage has confirmed 
that it will hurt lower-wage workers, as Dr. Holtz-Eakin 
explained:

          [I]ndependent research on Seattle's $15 per hour 
        minimum wage demonstrates that the new law has been 
        destructive for the city's low-wage workers. University 
        of Washington (UW) researchers--hired by the Seattle 
        City Council to analyze the new law--found that the 
        minimum wage increase caused 6.8 percent of low-wage 
        workers to lose their jobs, meaning that 10,000 workers 
        in Seattle have lost their jobs. . . . Evidence also 
        indicates that in addition to costing 10,000 low-wage 
        workers their jobs, Seattle's $15 per hour minimum wage 
        caused work hours among low-wage workers to fall by so 
        much that their monthly earnings declined. In 
        particular, the 2017 UW study concluded that Seattle's 
        minimum wage increase boosted the average wage rate 
        among low-wage workers by just 3.1 percent or $0.44 per 
        hour. Unfortunately, this modest wage increase was 
        entirely offset by declines in work hours. The UW 
        researchers find that Seattle's minimum wage law has 
        caused low-wage work hours to decline by 9.4 percent. 
        Consequently, even among the low-wage workers who are 
        still employed and earn slightly higher wages, their 
        average monthly earnings, on net, declined by $125 per 
        month because they lost so many work hours. When 
        combining the lost work hours with the 10,000 lost 
        jobs, the 2017 UW study concluded that Seattle's $15 
        minimum wage law reduced total income paid to the 
        city's low-wage workers by $120 million per year.\20\
---------------------------------------------------------------------------
    \20\Id. at 6.

    In addition, a $15 minimum wage can cause harm beyond job 
losses and reduced hours. A minimum wage increase can also 
reduce employer-provided benefits such as health insurance. A 
recent study found that state-level minimum wage increases 
decreased the likelihood of individuals reporting having 
employer-sponsored health insurance, with the largest effects 
among very low-paying occupations.\21\ Dr. Strain commented on 
---------------------------------------------------------------------------
additional negative consequences of a $15 minimum wage:

    \21\Jeffrey Clemens et al., The Minimum Wage, Fringe Benefits, and 
Worker Welfare, Nat'l Bureau Of Econ. Research, Working Paper 24635 
(May 2018).

          A minimum wage increase of this magnitude is also 
        imprudent because of the likelihood that such a large 
        increase will create unintended consequences. . . . In 
        my own research, my coauthors and I have found that 
        minimum wage increases are associated with decreases in 
        self-reported health outcomes among men, particularly 
        among unemployed men.\22\
---------------------------------------------------------------------------
    \22\Strain, supra note 5, at 5-6.
---------------------------------------------------------------------------

                   H.R. 582 WOULD HURT TIPPED WORKERS

    Under the Fair Labor Standards Act (FLSA), tipped workers 
must be paid at least the federal minimum wage. However, the 
FLSA permits a business owner to utilize a tip credit toward 
its minimum wage obligation.\23\ If cash wages and tips do not 
meet the federal minimum wage, the business owner must make up 
the difference.
---------------------------------------------------------------------------
    \23\29 U.S.C. 203(m)(2); 29 C.F.R. 531.59. Tipped employees are 
those who customarily receive more than $30 per month in tips. 29 
U.S.C. 203(t).
---------------------------------------------------------------------------
    Most tipped employees do not support eliminating the tip 
credit. They report earning over $14 per hour on average, with 
top earners receiving $24 or more.\24\ A survey of hundreds of 
restaurant employees found that 97 percent preferred the 
current system of a base wage and tips to a no-tip system.\25\ 
Moreover, Harvard Business School economists found a 14 percent 
increase in restaurant closures with each one-dollar increase 
in the base wage for tipped employees in the San Francisco Bay 
area.\26\ Dr. Holtz-Eakin discussed in his testimony how 
eliminating the tip credit, as some cities have done, could 
hurt employment:
---------------------------------------------------------------------------
    \24\Empl. Policies Inst., supra note 2, at 3.
    \25\Id.
    \26\Id.

          Likely worsening the effect on job growth, a number 
        of these cities boosted the ``tipped'' minimum wage by 
        eliminating the tip credit. While intended to boost pay 
        for tipped workers, eliminating the tip credit does not 
        make the most vulnerable better off. . . . For the 
        lowest earning tipped workers, eliminating the tip 
        credit makes little difference in their take-home pay. 
        Thus, removing the tip credit only places another 
        burden on restaurant businesses without improving the 
        livelihoods of low-income workers. This likely leads 
        businesses to further cut hours, jobs, or hiring.\27\
---------------------------------------------------------------------------
    \27\Holtz-Eakin, supra note 4, at 6.

    Ms. Simone Barron, a tipped worker in the full-service 
restaurant industry in Seattle, testified about her experience 
with a $15 minimum wage and no tip credit. She first noted in 
---------------------------------------------------------------------------
her testimony the benefits of being a tipped worker:

          Control over my earnings is one of the biggest perks 
        of working in the restaurant industry. The harder I 
        work to show hospitality to my guests, the better my 
        tip. That's an average of 20 percent I make on each 
        bill. The standard tipping model has a cost of living 
        increase built into its structure,--too as the cost of 
        goods goes up, so do menu prices and then so do tips. 
        Contrary to the rhetoric of my industry's critics, I'm 
        not ``forced'' to rely on tips-I've been able to thrive 
        on tips. Historically, in short four to six hour 
        shifts, I can earn $25 to $50 an hour--enough to make a 
        life for myself and my son.\28\
---------------------------------------------------------------------------
    \28\Gradually Raising the Minimum Wage to $15: Good for Workers, 
Good for Businesses, and Good for the Economy: Hearing Before the H. 
Comm. on Educ. and Labor, 116th Cong. (2019) (statement of Simone 
Barron at 1).

    However, in response to a $15 minimum wage in Seattle and 
no tip credit in the state of Washington, Ms. Barron's 
restaurant changed to a service-charge model with no tip line 
on the bill. As a result, Ms. Barron has seen a reduction in 
her take-home pay: ``The few dollars an hour increase in my 
minimum wage doesn't cover the loss of income because of not 
receiving tips.''\29\ She has had to take a second job to 
replace the lost income, her finances have become precarious, 
---------------------------------------------------------------------------
and her quality of life has been diminished:

    \29\Id. at 2.
---------------------------------------------------------------------------
          I used to work 4 shifts a week and made enough money 
        to raise a son, pay my rent, go to school and be a part 
        of a vibrant arts community. With the cost of living 
        skyrocketing and the impact of the minimum wage 
        increase on my income, I had to get a second job and 
        work 6 days a week. I couldn't sustain that pace. Now, 
        I worry every month about paying my rent. This is a 
        worry I have never had until the minimum wage increase 
        impacted my job. I have had to give up my passion of 
        acting, I no longer can take trips with my kid in the 
        summers. My smaller income all goes to bills, all my 
        time goes to picking up just one more shift.\30\
---------------------------------------------------------------------------
    \30\Id.

    Ms. Barron's story shows the real-world damage H.R. 582 
will have on individuals across the nation.

        H.R. 582 WOULD THREATEN SMALL BUSINESSES AND THE ECONOMY

    According to a January 2019 study done by the National 
Federation of Independent Business (NFIB), enacting H.R. 582 
would over a 10-year period reduce U.S. private sector 
employment by over 1.6 million jobs and result in a cumulative 
reduction in U.S. real output of over $2 trillion. Small 
businesses would be particularly hurt. Businesses with fewer 
than 500 employees would see 57 percent of private sector job 
losses--over 900,000 lost jobs; businesses with fewer than 100 
employees would see about 43 percent of all jobs lost--nearly 
700,000 jobs.\31\
---------------------------------------------------------------------------
    \31\MichaeL J. Chow and Paul S. Bettencourt, NFIB Research Ctr., 
Economic Effects of Enacting the Raise the Wage Act on Small Businesses 
and the U.S. Economy 10 (Jan. 25, 2019).
---------------------------------------------------------------------------
    Dr. Holtz-Eakin noted in his testimony that research has 
shown minimum wage hikes result in ``a slowdown in hiring, 
increasing prices, .  .  . and firms shutting down 
altogether.'' As previously discussed, Dr. Holtz-Eakin 
estimates a $15 federal minimum wage would result in a loss of 
9.6 million jobs, which would nearly wipe out the 10.2 million 
jobs the U.S. economy has added since the end of 2014.\32\
---------------------------------------------------------------------------
    \32\Holtz-Eakin, supra note 4, at 4.
---------------------------------------------------------------------------
    In a survey of small businesses, 47 percent said a two-year 
phased-in $15 minimum wage would negatively impact their 
business. Of those reporting a negative impact, 85 percent 
anticipated they would have to increase the price of goods and 
services, passing on some of those price increases to 
consumers, and 74 percent said they would absorb wage increases 
through lower earnings. Fifty-eight percent anticipated using 
less expensive or part-time workers; 69 percent would not fill 
an open position; 63 percent would reduce employee hours; and 
62 percent would reduce the number of employees working at 
their business.\33\
---------------------------------------------------------------------------
    \33\NFIB Nat'l Small Business Poll, Job Openings 1 (2017), http://
411sbfacts.com/files/NFIB_SBP_JobOpenings2017B_final.pdf.
---------------------------------------------------------------------------
    A recent survey of 173 restaurants representing more than 
4,000 restaurant locations ranging from fine dining to fast 
food found that 71 percent of operators responded to state and 
local minimum wage hikes by raising menu prices. In addition, 
64 percent said they responded by reducing employee hours, and 
43 percent said they eliminated jobs.\34\
---------------------------------------------------------------------------
    \34\Amelia Lucas, Higher minimum wage means restaurants raise 
prices and fewer employee hours, survey finds, CNBC, Apr. 11, 2019. The 
survey was conducted by Harri, a workplace management software company 
that works with restaurants.
---------------------------------------------------------------------------

            H.R. 582 IS NOT AN EFFECTIVE ANTI-POVERTY POLICY

    The $15 minimum wage will not alleviate poverty. In 2014, 
only 35 percent of individuals living in households with 
incomes under the federal poverty line were employed at any 
time during the previous year. Conversely, most people who 
would be affected by a $15 minimum wage are not poor. The 
average family income for affected individuals would be 
$56,982. Nearly half--48.4 percent of those who would be 
affected by a $15 minimum wage--live in households with incomes 
over three times the federal poverty line.\35\
---------------------------------------------------------------------------
    \35\Empl. Policies Inst., supra note 2, at 2.
---------------------------------------------------------------------------
    Dr. Holtz-Eakin elaborated on why a $15 minimum wage will 
not help those in poverty:

          Evidence on the federal and local level indicates 
        that raising the minimum wage is an ineffective way to 
        assist low-income workers. Hourly wages do not 
        effectively identify economic well-being, as minimum 
        wage workers are from families across the income 
        distribution. While some minimum wage workers are in 
        poverty, the vast majority are not. For instance, 80 
        percent of those who make the federal minimum wage of 
        $7.25 per hour are not in poverty. Meanwhile, over one-
        third of minimum wage workers are young adults who 
        still live with their parents. The incomes of those 
        families average more than $100,000. Thus, raising the 
        federal minimum wage to $15 per hour would result in 
        significant job loss in order to provide minimal 
        benefits to low-income workers. When examining the 
        effect of raising the federal minimum wage to $15 per 
        hour, the AAF-Manhattan Institute study found that only 
        6.7 percent of the net change in wage earnings would go 
        to workers in poverty, according to the middle 
        estimate. Twice as much, 14.7 percent, would go to 
        workers with family incomes over six-times the poverty 
        threshold. Consequently, at best, a $15 per hour 
        minimum wage will only marginally help low-income 
        workers.\36\
---------------------------------------------------------------------------
    \36\Holtz-Eakin, supra note 4, at 6-7.

    The previous points represent only a few of the predictable 
and extremely negative consequences of enacting H.R. 582. As 
noted in Dr. Strain's testimony, because a 107 percent increase 
in the federal minimum wage is far outside the national and 
international evidence base, the potential unintended 
consequences of passing this legislation constitute a ``large 
and risky gamble.'' It is irresponsible for Congressional 
Democrats to foist a radical and unprecedented economic 
experiment on workers, businesses, and the American economy, 
and as such, H.R. 582 should be rejected.

                         Republican Amendments

    H.R. 582 imposes a sudden and significant shift in labor 
costs that will be felt by students, workers, businesses, and 
the economy. During Committee consideration of H.R. 582, 
Republicans offered amendments in an attempt to protect 
Americans from the irresponsible policy espoused in this bill, 
to no avail.
    First, Representative Ben Cline (R-VA) focused on a key 
priority of Committee Republicans--American job growth. With 
our current growing economy and 7 million unfilled jobs 
nationwide, wages are rising as job creators understand the 
need to offer competitive wages and benefits in order to retain 
and attract workers. But with studies showing that a 107 
percent increase in the federal minimum wage will result in the 
loss of 1.6 million jobs or even much more, it would be 
egregiously irresponsible to enact this legislation without an 
``off ramp'' to prevent the increase from phasing in if harmful 
economic conditions arise. With this understanding, Mr. Cline 
offered an amendment to ensure that the radical wage hikes 
mandated by H.R. 582 will not continue if jobs are being lost, 
an approach similar to provisions in state minimum wage laws, 
including those in high-minimum wage states such as California 
and New York. On a party line vote, this amendment was 
defeated, with all Committee Democrats opposed.
    Small businesses employ almost half of American workers and 
account for two-thirds of net new jobs. In an effort to protect 
those that drive local economies and are most vulnerable to a 
radical increase in the federal minimum wage, Representative 
Dan Meuser (R-PA) offered an amendment to shield the smallest 
of businesses from the sudden and extreme spike in labor costs 
mandated in this bill. A study by the NFIB estimated that 57 
percent of job losses caused by this bill will come from small 
businesses,\37\ which make up 99.9 percent of all businesses in 
the United States.\38\ Despite these truths and the sensible 
support of this amendment by Representative Haley Stevens (D-
MI), the amendment was disapproved by a vote of 24-21.
---------------------------------------------------------------------------
    \37\MichaeL J. Chow and Paul S. Bettencourt, supra note 31.
    \38\U.S. Small Bus. Admin., 2018 Small Business Profile, https://
www.sba.gov/sites/default/files/advocacy/2018-Small-Business-Profiles-
US.pdf.
---------------------------------------------------------------------------
    Concerned with the bill's negative impacts on students and 
young workers, Representative Rick Allen (R-GA) offered an 
amendment to protect youth employment by ensuring future wage 
hikes are halted if a significant number of young workers are 
unemployed. Almost half of workers paid at or below minimum 
wage are under the age of 25.\39\ A radical $15 minimum wage 
rate would create an insurmountable barrier to entry for young 
workers who generally possess fewer skills and less experience, 
and who rely on entry-level jobs to build critical competencies 
of personal responsibility, teamwork, conflict resolution, 
discipline, and accountability. Committee Democrats continued 
to demonstrate a lack of confidence in their proffered policy's 
ability to benefit American workers by unanimously opposing 
this amendment.
---------------------------------------------------------------------------
    \39\U.S. Dep't of Labor, supra note 16.
---------------------------------------------------------------------------
    Because Committee Republicans believe all American workers 
deserve equal protection under the law, Representative Lloyd 
Smucker (R-PA) offered an amendment to prohibit any state or 
locality from adopting a minimum wage law that exempts 
employees covered by a collective bargaining agreement. In 
recent years, attempting to boost union organizing efforts, 
localities such as Los Angeles, San Francisco, San Jose, 
Oakland, Santa Monica, Long Beach, and the City of SeaTac, 
Washington, passed minimum wage laws which exempted workers 
covered by a collective bargaining agreement. The Los Angeles 
Times editorial board called this ``hypocrisy at its 
worst.''\40\ In a striking display of support for labor unions 
at the expense of a large majority of their constituents, 
Committee Democrats voted unanimously to defeat this amendment.
---------------------------------------------------------------------------
    \40\Editorial, L.A. labor leaders' hypocrisy on minimum wage hike, 
L.A. Times, May 29, 2015.
---------------------------------------------------------------------------
    Concerned about the lack of transparency and fairness 
displayed by the Committee Majority in the consideration of 
this legislation, the Committee's Republican Leader, 
Representative Virginia Foxx (R-NC), offered an amendment to 
strike the eleventh-hour provision in the chairman's Amendment 
in the Nature of a Substitute which delays the effective date 
of the legislation for workers in the Commonwealth of the 
Northern Mariana Islands.\41\ In defense of this last-minute 
exemption, Representative Gregorio Kilili Camacho Sablan (D-MP) 
explained that lower average wages in the Northern Mariana 
Islands require a different approach to the minimum wage--an 
argument that also applies to many regions of the United States 
which are not afforded such consideration under this 
legislation. In support of this eleventh-hour special 
exemption, Committee Democrats voted unanimously to defeat this 
amendment.
---------------------------------------------------------------------------
    \41\Amendment in the Nature of a Substitute to H.R. 582 Offered by 
Mr. Scott of Virginia Sec. 7(2).
---------------------------------------------------------------------------
    In recognition that H.R. 582's sudden and extreme hikes in 
labor costs would cause workforce automation to surge forward 
at a faster rate, Representative Ron Wright (R-TX) offered an 
amendment to stall the bill's damaging effects if the 
Government Accountability Office (GAO) finds the bill will 
cause more than 500,000 jobs to be lost due to automation. 
Committee Democrats, aside from Ms. Stevens, opposed the 
amendment, choosing to stand behind an ideological priority 
even if real American jobs are shown to be in peril.
    Finally, Representative Phil Roe (R-TN) offered an 
amendment to protect workers in rural communities around the 
country. The Roe amendment instructs GAO to study the effect of 
this legislation on regions of the country with lower costs of 
living, such as rural areas, and prevents the legislation from 
going into effect if GAO finds it will result in the loss of 
200,000 or more jobs in these areas. By unanimously voting 
against this straightforward amendment, Committee Democrats 
demonstrated a lack of concern for the regional implications of 
this radical legislation which threatens millions of American 
jobs around the country.

                               Conclusion

    H.R. 582 would inflict a radical, unprecedented increase in 
the federal minimum wage. It would harm workers, businesses, 
and the economy while failing to provide benefits to the people 
the bill is purported to help. For these reasons, and those 
outlined above, Committee Republicans strongly oppose enactment 
of H.R. 582 as reported by the Committee on Education and 
Labor.
                                   Virginia Foxx,
                                           Ranking Member.
                                   Glenn ``GT'' Thompson.
                                   Brett Guthrie.
                                   Glenn Grothman.
                                   Rick W. Allen.
                                   Lloyd Smucker.
                                   Mark Walker.
                                   Ben Cline.
                                   David P. Roe, M.D.
                                   Tim Walberg.
                                   Bradley Byrne.
                                   Russ Fulcher.

                                  [all]